Jamestown L.P. is a unique property company in a number of ways. Started by a German investor it has been a way for German nationals to invest in large scale property developments since 1983. Their investment thesis seems to include buying and developing iconic mixed use buildings with lively community hubs, like One Time Square, the building with the New Years ball on top. They have also make large purchases like Chelsea Market and the General Motors Building in Manhattan, the development of the Ponce City Market in Atlanta and Ghirardelli Square in San Francisco. In a brilliant move, and one that was likely seen as a bit crazy at the time, the company liquidated 75 percent of their portfolio and reimbursed their investors.
Now they are doing something equally as unorthodox: they are opening up their investments in a crowdfunding platform. Real estate crowdfunding is estimated to reach $9 billion by 2021. The US alone accounts for three-quarters of global crowdfunding in real estate and is home to many of the leading platforms for real estate. The popularity of these platforms shows that everyday people want to invest in commercial real estate online. Jamestown Invest launched last December with a $50 million fund. It operates as a direct-to-consumer investment platform that allows anyone to invest in commercial properties within lively community hubs.
Under the leadership of its president, Michael Phillips, Jamestown’s assets have grown from $3 billion to $12 billion since 2009. Jamestown Invest represents a new chapter for the company and a natural progression.
“It’s another leg on the stool,” Phillips shares, in an exclusive interview with Propmodo. “I think the idea that people have some clearer connection and access to how their money’s being invested and who is managing it, will continue to grow.”
Jamestown boasts an amazingly strong social media community, 900,000 followers strong. Their Instagram alone is like a case study in well-executed real estate social media outreach. According to Phillips, engaging with the community online and offline has given Jamestown a unique perspective on what would-be investors want from an investment platform. “We take data points from the feedback loops from social media of how people are consuming and how people are processing. You can create communities that are designed to attract and retain and to create opportunity for the whole community,” he said. “As a vertically integrated operator, we’re doing our own repositioning, leasing, design, community building activation, property management. We’re touching our customers on a daily basis and we understand what they value.”
The first fund’s target assets include Southern Dairies at Ponce Market and The Upper Westside Portfolio – both located in Atlanta, which is also home to Jamestown’s headquarters. Describing the fund, Phillips says it will include investments that have a core real estate strategy. “Depending on where you invest, some of it could go in pool, and others of it could be clearly delineated with seed assets. The idea is that there would be multiple funds and they would have multiple assets of similar or complementary profiles and curiosities.”
Jamestown Invest gives individuals a chance to invest in commercial properties within their local communities, at the fraction of the cost usually associated with commercial real estate investment platforms. Investment starts at $2500.
“It allows people to become investors in institutional-grade real estate in a way that they wouldn’t have otherwise, and it’s not in a nameless, faceless way,” Phillips explains. “It’s in the real estate in our community.” He goes on to say, “if you think about the places we gravitate towards that have a sense of dynamism and community mission, those are the things that we aspire to align ourselves with individually. To be able to invest in those kinds of things, and to do it in a way that is direct and in direct dialogue with the fund sponsor, is unique.”
Community ties are a distinctive aspect of Jamestown Invest’s model, but there’s a delicate balance of merging existing industry practices, with a more tech-driven mindset. Phillips says Jamestown adopts both approaches. “We embrace innovation and in the real estate world, where your core fundamentals are about stability, track record and return, which is in direct contrast to the technology world, which is about testing, iterating, and high rates of failure are accepted,” he said.
Jamestown’s international presence in Europe and Latin America also influences how they identify trends in tandem with a futuristic mindset. “For us as a company, marrying those disciplines in a way that allows us to create a sense of innovation and opportunity, without challenging fundamentals, is rare.”
We’ve staked out a position that innovation will become as ubiquitous as sustainability.Michael Phillips, President, Jamestown LP
During Phillip’s tenure at Jamestown, he has witnessed sustainability shift from an afterthought to a “baseline expectation” for investors and likens that change to the innovation behind the democratization of commercial real estate investment. Jamestown Invest embodies that transformation. “We’ve staked out a position that innovation will become as ubiquitous as sustainability,” Phillips asserts. “For the people who want to invest, we are institutional investors and we’re seen as great thought partners for them in that regard, and increasingly, that’s becoming the standard.”
This represents a major shift in the way traditional property owners fund their operations. It has the ability to not only let people invest in Class A properties alongside a seasoned and proven company. It also has the ability to bring communities together. As more people are able to have a financial stake in the properties around them we might see a different kind of connection between people and place—the kind that hopefully makes money.