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- Academy alumni redefine real estate with Thirdspace
Academy alumni redefine real estate with Thirdspace
May 13, 2019
Welcome to Thirdspace, a real estate startup focused on short term retail. With more brands using brick and mortar stores for experiential marketing, co-founders Will Berman and Chris Caskey have developed a streamlined real estate business model to connect brands and pop-ups to physical spaces. Their latest collaboration brings Brazil-born sneakers, Cariuma, to Venice Beach where shoppers can touch, feel and wear consciously-made shoes. Here, Will and Chris share their inspiration and vision for L.A.’s urban landscape...
What is Thirdspace?
CC: We are a real estate operations and development company. Our vision is to build small-scale developments that blend in with the urban fabric and foster community within local neighborhoods. Our approach is two-fold: first, through well-executed landscape architecture we create inviting public green spaces for people to gather and congregate. Second, we surround these public gathering places with curated rotating “pop-ups” that operate on three- to six-month leases.
What inspired Thirdspace and what do you hope to achieve with Thirdspace?
WB: One of our biggest inspirations was Ray Oldenburg, an ethnographer who studied cities and created the concept of the “third place.” He said that there are three places humans occupy: first is the home, second is the workplace, and third is any public gathering place that facilitates social interaction and community. These “third places,” Oldenburg observed, are as old as human civilization — from the agoras in Ancient Greece and tea houses in Japan to, more recently, coffee shops like Starbucks.
We saw this concept taking on new meaning in our digital age. Thirdspace started with the question “What if we create a company to design environments that bring people together in the real world?” In the past 10 years we’ve seen AirBnB revolutionize the home and WeWork revolutionize the workplace, so we set out to do the same for Oldenberg’s “third place.” In the process, we stumbled on a rapidly-growing trend in retail and an extremely viable business model … pop-ups.
Another inspiration of ours was the park, High Line, in New York City. I grew up going to the High Line and fell in love with the idea that, through beautiful design, a run-down and deserted railway track could become a vibrant public park along the Hudson River. The High Line attracts roughly five million annual visitors and generates substantial revenue for both local businesses and the city.
As you survey the current urban landscape, why is a third place relevant?
CC: More than ever, our society is drawn to their phones and into the digital. Part of the reason we gravitated towards this project is because it’s rooted in the real world. By nature, humans are physical beings, so our organic and built environments are the most comfortable and intuitive to us.
WB: I also think Los Angeles is the perfect place to start — it's a city known for its urban sprawl and has the least public green space per capita of any major U.S. city. We loved the idea of bringing new life to the L.A. strip mall — a symbol of a city designed for the automobile — and turning it into a vibrant green space with food, events and ever-changing shops. Down the road we imagine adapting the same model to other types of underutilized real estate assets like old gas stations, parking structures or warehouses.
How do you think millennials and future generations want to experience their brands?
One of the biggest things we’ve learned over the past year is that what we think doesn’t really matter all that much if it’s not what our customers think. We went out and spoke to brands doing pop-up events and researched more broadly how retail is changing. It just so happened that our suspicions were right: around 95 percent of [Gen Z] visited a physical shopping center in a three-month period in 2018, as opposed to just 75 percent of Millennials and 58 percent of Gen X (according to ICSC). Three-quarters of them said it was a better experience than shopping online.
All the trends we’ve come across point towards the future of brick-and-mortar functioning as a form of entertainment. That’s where we believe there is crossover between our vision for creating “third places” and curated pop-ups. Thirdspace is not another shopping mall. If a pop-up store’s main focus is not strictly sales (which can be accomplished online), brands have the opportunity to more freely experiment with brick-and-mortar, creating enjoyable and exciting experiences that function as great marketing.
From the Thirdspace perspective, what’s changing (or not) in commercial real estate? How do you think the real estate business model needs to change.
I think what’s most interesting is that the way brands want to use space is clearly changing, but commercial real estate hasn’t necessarily caught up yet. It’s an established industry that’s resistant to change, but e-commerce has disrupted the retail model and nobody has really come up with a standardized solution.
Real estate brokerages are not incentivized to piece together these short term leases. The commissions are the same percentage as longer term leases, but there is much more work required to string together multiple leases than a single five-year lease.
The spaces themselves also aren’t designed to streamline this turnover process, so brands end up spending a week before their pop-up lease on setup, and a week after on teardown, equating to thousands of dollars lost. Lastly, landlords struggle to get the dates of these pop-ups to line up. With Thirdspace we plan to solve all of these inefficiencies in traditional commercial real estate.
In your opinion, what’s the best thing about pop-ups and what’s the best pop-up you’ve experienced?
CC: The best part for me is the opportunity to see something cool put a face to my favorite brands.
WB: I love that pop-ups allow for physical spaces to perpetually change. I think our physical world should “refresh,” in the same way that social media news feeds incentivize a reason to return by offering something new every time you load the page.
Our event with Cariuma that’s located at 1306 Abbot Kinney Boulevard, of course! Go check it out and pick up a pair of funky Brazilian sneakers.
May 10 – July 28
10 am – 7 pm
1306 Abbot Kinney Boulevard