(Photo by Juliana Reyes)
MakeOffices barreled into Philadelphia at the start of the year.
Those plans haven’t entirely come through, however.
One location is close to opening, said CEO Raymond Rahbar. The four-floor, 67,000-square-foot space at 1635 Market St. had some construction delays but will be open in the first few weeks of 2017, he told us.
But MakeOffices no longer plans to open a space at The Bourse, the historic building on Independence Mall that’s getting a multimillion-dollar facelift to attract sexier tenants.
“While initially we were really excited to go to The Bourse, after doing initial due diligence, we decided that the project was not right for us,” Rahbar said.
That must have been just a tad awkward because the Bourse happens to be owned by one of MakeOffices’ investors. Earlier this year, The Bourse was purchased by D.C. real estate developer MRP Realty and Chicago-based private equity firm Walton Street Capital, who are leading the charge to renovate the building. About a year before that, MRP Realty lead MakeOffices’ $14 million-plus funding round. Rahbar declined to comment on how that relationship affected the deal, but MRP Realty’s Zach Wade told us it’s an “arm’s length deal,” one that would only go through if it made sense for all parties. He added that MRP plans to try to get MakeOffices back on board once they renovate The Bourse’s ground-level food court. (MRP Realty envisions transforming the food court into something in the vein of Manhattan’s Eataly or Chelsea Market, a more upscale Reading Terminal Market, Wade said. (Editor’s note: The food court’s no-frills Mexico is a slept-on treasure.))
Now that The Bourse is trying to reinvent itself, MakeOffices seems like it’d be the perfect anchor tenant for that new image. So what happened?
One source who spoke on condition of anonymity said it was a matter of the neighborhood. It’s too touristy. It just doesn’t have that N3rd Street vibe, even if it’s only a few blocks away from the corridor. MakeOffices, the source said, was worried about attracting customers there.
That sounded on point to Adam Glaser, chief design officer of Benjamin’s Desk, who said that The Bourse’s location is tough since it’s right on Independence Mall. The Liberty Bell and throngs of tourists don’t exactly scream “disruption.”
We turned to Glaser because Benjamin’s Desk itself runs a coworking space in a historic building on 7th Street, just a few blocks from The Bourse, at the Curtis Center. (Technically Media is, full disclosure, headquartered at the Curtis Center and a tenant of coworking space Benjamin’s Desk.)
He said Benjamin’s Desk’s Curtis Center location hasn’t run into the same “vibe” problems you might expect at The Bourse, noting that, in a city, even just one block can make a big difference in ambience.
“N3rd Street feels like it’s in a different city [from The Bourse],” Glaser said, “and I feel like 7th Street does too.”
He also mentioned how The Bourse is a “funny building” because it lacks views into the city and feels isolated. Probably has something to do with its past as a stock exchange. Glaser, for his part, wouldn’t put it on his short list for a coworking space, either.
But MRP Realty’s Wade said he’s not convinced that’s the case: there are plenty of small businesses on N3rd Street that don’t have a place to grow, he said, and he’s betting they’ll turn to The Bourse, once it’s gotten the creative office treatment.
“That’s what this building can provide,” he said.
Makes you wonder: are some areas in Philly just not equipped to become creative office meccas? And what does that mean for the real estate developers (and the coworking providers) that are scrambling to cash in on the new tech office trend?
Speaking of neighborhoods that may or may not be ready for the new model of office space, Rahbar wouldn’t give us the official word but we hear that for its third location, MakeOffices is eyeing the Navy Yard or Callowhill — both neighborhoods that have largely gone untapped when it comes to coworking.-30-
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