Jamestown’s Michael Phillips Is Hungry for Northern Va. Offices and DC Apartments
Few people in real estate can say that they were at the helm as their company went from $3 billion in assets to $12 billion in six short years.
Phillips joined the firm in 2008 as the creative director and currently serves as a principal and the president of Jamestown, which has built a reputation for repositioning underutilized properties in urban spaces—and Phillips has been the driving force in turning the company into a nationally dominant one in the commercial real estate market.
Between 2009 and 2015, the firm’s national assets ballooned to approximately $12 billion from $3 billion. Phillips recently told Commercial Observer that he was “a big driver of strategy” with his partners during that time. Headquartered in Atlanta, Ga., the firm has offices in New York, Boston, San Francisco, Los Angeles and Bogotá, Colombia. Phillips, 49, resides in Atlanta with his partner, but also owns a home in Maine.
One of Jamestown’s most high-profile transactions took place this year—the $2.4 billion sale of the Chelsea Market building in Manhattan to Google, as Commercial Observer reported in March.
In Washington, D.C., Jamestown owns several Georgetown and Downtown properties, including Georgetown Park and America’s Square. The firm’s latest D.C. acquisition is The Ellington, a 190-unit apartment building near the U Street corridor that the company purchased in March for $120 million, the Washington Business Journal reported.
While the District will always attract corporate and federal tenants, Phillips said that Northern Virginia, where Jamestown is developing the Ballston Exchange, “is becoming more entrepreneurial and dynamic.”
Ballston Exchange entails the remodeling of two office buildings near the Rosslyn-Ballston Metro station. Food retailers including Philz Coffee, Shake Shack, We the Pizza and Cava have already signed on, as well as New York City-based flexible workspace provider Industrious, as CO previously reported. Construction on the redevelopment is expected to be completed in late 2018.
Splitting most of his time between Atlanta and New York City, Phillips said he spends a couple of days a month in the nation’s capital, mostly at hotels in Georgetown. He spoke with CO about his outlook on the region and what it takes to helm transformative projects across the country.
Commercial Observer: Outside of Georgetown and Downtown where Jamestown owns multiple properties, are there any neighborhoods or developments that are intriguing to you in D.C.?
Michael Phillips: We just bought The Ellington on 13th Street [the property was built in 2004]. We very much like Ballston and we think that whole area of Northern Virginia is experiencing an interesting renaissance in terms of having the highest number of millennials and people in the technology sector.
Are you going to make any upgrades to The Ellington?
Yes, we are developing a plan for improvement to the building and look forward to sharing more details soon.
How do the D.C. and Northern Virginia real estate markets differ to you?
I see them as a little different. Obviouly, the public and association tenants that have long occupied Northern Virginia are shifting a bit and I think you’re seeing a lot more private companies in that space. And I think D.C. will continue to be a generalist office market with a lot of law firms, associations, advocacy groups and blue-chip corporate tenants.
Jamestown has been called an experiential company. Do you agree and if so, what do you think is your best example of that?
I think we’re very focused on creating an integrated, dynamic, aspirational, inclusive and community environment, and I would certainly think it’s experiential in terms of that. I think Ponce City Market in Atlanta and Chelsea Market are great examples of that. I think our Georgetown portfolio is evidence of that and Industry City [in Brooklyn] and Ghirardelli Square in San Francisco. I don’t know that I’d pick a best but I would say there’s a lot of that. I think that creating programming and a dynamic mix of tenants is at the center of our business ethos.
Do tenants typically come to you or do you target specific businesses to create dynamic developments?
Some of both—I think people are aware of who we are and the environments that we create and see that as a programmatic way to grow their businesses. So there’s some of that with retail tenants and office tenants. And we pay attention to new companies that are growing and legacy companies that are reinventing themselves.
For the Ballston Exchange project, did you seek out any of the retailers in particular?
Sure, I think we certainly reached out to some of our retail tenants like Shake Shack and Industrious. Others have come to us.
Outside of business pursuits, what do you find interesting about D.C.?
I think it’s an exciting time for D.C. I definitely think it’s a city at the forefront of this next millennial generation in terms of workforce, energy and things of value to them. I think the food culture in D.C. has come leaps and bounds in the past five years, it’s sort of at the center of what’s happening. As far as arts and culture, there are a lot of Old Line institutions like the Hirshhorn Museum and Sculpture Garden that have evolved in a great way and other notable places like The National Museum of African American History and Culture and The National Museum of the American Indian. It’s a lot going on that I think is really interesting.
Jamestown incorporates technology in unique ways like using data to show retailers how brick-and-mortar locations drive business online, as CO previously reported. How important is technology to the overall business?
I think it’s definitely important to us in terms of using applications to make our communities better, deliver services and experiences, and B-to-B connections for our tenants. I think it should be important to any service business and in that regard, we see real estate as a service business. We’re providing a solution for people, either to have their businesses or their residences transact and so I think it should be important.
I read that part of your formula for creating transformative projects is having patience, how do you put this into practice?
I think that creating places doesn’t follow one prescribed formula—some of them are equal parts tangible things and intangible things and it takes a certain amount of enacting something, watching how people respond to it and adding something else or tweaking. Great places happen over a long period of time—they’re not made overnight. So you have to have a lot of patience in that regard because you’re dealing with something that’s organic and it’s successful only because people feel emotional about it and connected to it and respond to it. I think any time you have a lot of different people involved, you have to be patient.
You’ve called Chelsea Market a “transformative” project. Can you envision a Jamestown project in D.C. that could reach that level?
Chelsea Market is a very specific kind of centralized, single asset. I think we’re seeing a lot of opportunities around the world for things like that—we haven’t landed on one specifically for D.C.