SteelWave Brings Style, Culture And Creativity To Commercial Real Estate (CRE) And The World Of Work

Barry DiRaimondo

For over 40 years, SteelWave, a design-led commercial real estate company has successfully acquired, transformed, and reimagined creative office, life science, and industrial properties across the United States; never more timely an endeavor as the world of work is changing like never before and employers and employees from all walks of life are returning to the Office on their own terms.

On the heels of the launch of their excitingly unique digital investment vehicle, Haute Living had the opportunity to speak with Barry DiRaimondo, Mitch DiRaimondo, and Matt Ford about the compellingly-relevant environment SteelWave finds itself in as a company in 2023.

Haute Living: In an era where innovation seems to be at the heart of everything, how does SteelWave distinguish itself by incorporating industry and life science tech, modern amenities, and frankly, style into pre-existing working spaces?

Barry DiRaimondo: At the heart of everything we do is creating innovative work environments where people are inspired to go to work.

We create work environments that don’t feel like work environments, incorporating hospitality elements and incorporating residential elements that appeal to our target audience, which is the innovation workforce, today’s tech workforce.

It’s media tech, it’s design tech, it’s social tech, it’s traditional tech, it’s defense tech, go down the list – But importantly, it’s an innovative workforce, and our job is to create a work environment that inspires them to go to work and be productive.

Matt Ford: Post-COVID-19, we’re not just providing our users, our tenants, with this compelling space. In this work-from-home climate, we’re actually competing with people’s homes.

We’re trying to bring an experience that encompasses everything from entertainment to just the feeling of relaxation, and the joy one gets from being around their home.

And so when we do this correctly, and everything aligns, and we execute, we have people coming to our projects that don’t work at our projects, they’re drawn to it just like they’re drawn to going anywhere else outside of their home, like a park, or a nice cafe.

We are creating experiences, so we’re not really competing with other offices.

Barry DiRaimondo: While the work-from-home scenario was originally a Covid-related phenomenon, we’ve been creating work environments for years. And we’ve taken what we’ve learned on the office side and introduced it into the lab side of things and the life science side.

You can’t make a lab cool. Sorry, you just can’t! But the lab itself is only 50% of the space, and you can make the office and the shared space very cool.

And so we’ve taken what we’ve learned on the office side and incorporated it into a much more technical side of things, the life science side.

Mitch DiRaimondo: Look, we are creating campuses that people aren’t mass-producing. It’s a very, very specialized space, bespoke for each tenant.

 

Haute Living: SteelWave has been at the forefront of drafting communal spaces, a mix of, industrious, next-gen,  life science,  and defense tech campuses complete with urban living environments – What inspired this uniquely ambitious ethos in design and architecture?

Matt Ford: It’s really about not following trends; and looking at each project, whether it’s simply a piece of land, every single thing we do has its own particular set of requirements, hurdles, and obligations.

And so we just look at the mix of our parameters and try to do something authentic. And that authenticity guides everything.

SteelWave in fact doesn’t have a particular style; it does have a very high level of experience and passion that we try to bring to everything we do, but it’s all about figuring out the best, most honest take on what we think each development needs to be.

And there’s a lot of people that feed into that process, a lot of stakeholders, that work with us as to what the parameters need to be. And we take that box of parts and figure out how to create something amazing and truly unique.

Barry DiRaimondo: Anyone can throw architecture at a situation and create modern stuff. The challenge is to take all the pieces together and humanize it. And I think that’s what most people miss – there is no shortage of architecture without humanization.

As Matt said, every deal is different. Every building’s different. The bones you start with are different. The location is different. The surrounding set of assets is different. And what you’re trying to do is build with those chess pieces.

It’s very difficult to describe what’s ‘cool’, and what’s invigorating. But when you’re standing there in the middle of a site, it gets tactile on a level.

When you get it right, you know it – And you know it when you’re standing there.

Matt Ford: Barry used the word that I often use, humanization.

I think it’s really more about what feels real. And when you’re in these iconic spaces, you feel it; it emanates, whether it’s Chelsea Market in New York, or you name it. And that’s what we try to get, something that feels real, and that is very difficult.

There’s no formula or recipe, it’s just a lot of hard work.

Haute Living: And so, much like a fashion designer might have a signature style, how would you define SteelWave’s signature style?

Barry DiRaimondo: Yeah, everything’s different.

Matt Ford

Matt Ford: Although we don’t have a signature style – We do have a signature process. What we try to do is break down the walls between all the different components that are required to create these amazing projects. SteelWave made the decision years ago to invest internally in our design team which has helped make this possible. In doing so we not only manage the design process better but are able to move between the traditional silos of operators and the more creative fields. This helps us communicate our design priorities with less friction or dilution.

While the process is definable, the style isn’t.

Barry DiRaimondo: Yeah. I think if there’s a signature style, it’s a level.

What we’re doing in Denver is very different from what we’re doing in LA, for example. And the architects we’re using in Denver are probably different from those we’re using in LA, to ‘polish the edges’ if you will.

Mitch DiRaimondo: I think it’s important to note that each of these deals is an art piece, and you feel the city’s want for it.

LA’s style is obviously going to be different than Denver’s because the clientele is different, and the people going to the workspace are going to be different.

But SteelWave does a really good job of ensuring that no matter what the company does, it’s committed to top-level results.

A lot of our competitors look to copy each other. Our single biggest definable quality is our track record in maintaining such a high level of perfectionism in each of our designs.

It simply differentiates us from everyone else.

 

Barry DiRaimondo: I think architecture lends itself to modular design. And that’s not really what resonates with people.

Most organizations work with an architect and the architect handles the whole project. But at the end of the day, the architect is just using their individual knowledge of architecture in general; perhaps a classic design, depending on who the architect is.

You can’t create our campuses on paper – It just doesn’t work that way.

Matt Ford: I totally agree. To speak to Mitch and Barry’s point, even within the same market, we have our project, Casitas, in Atwater Village that is Bohemian, completely integrated with a neighborhood, a situation where we went in a completely different direction artistically than what we did with our Arts District deal, the Switchyard, which was kind of a brand-new building, and had a completely different set of parameters.

So you end up, even within the same municipal market with very different approaches for each project, using different architecture firms, different artists, different everything – it’s not right to use one group for every project.

And as Barry said, you can’t just hand any one of our projects over to an architect and take a backseat. We have so much experience; we try to squeeze all the juice out of all the different levels of knowledge and expertise within our firm. And then, we invite others to join – on the subject of landscape, art, signage, and design – we just keep building onto that origin.

Barry DiRaimondo: Well, a lot of this stuff starts with a story – You have to figure out what the story is.

Your story at the Berkeley lab may differ significantly from your story at Casitas. And then the design just expresses the story.

Haute Living: Is it the view of SteelWave that the future of commercial real estate lies in vibrant ecosystems where life and work coexist harmoniously?

Barry DiRaimondo: Yes. Look, those people that get it and deliver it will prosper more.

What’s happened in the world of office space, given this whole dynamic of work-from-home that we’re competing with, is that nobody wants to go to work. No one in the innovation ecosystem wants to go work at a commodity office building. They just don’t.

You wouldn’t build a call center with the understanding that the Googles of the world would think it was going to be a great place to go to work. You just wouldn’t do that.

So you have to understand your audience. And in our situation, our audiences are creatives – they can be technical, but they’re still very creative and collaborative.

And the office environment has changed with the best practices of work. It used to be that the engineers were all in private offices around the edges, and the marketing people were all in private offices, none of which were connected to each other. And so they worked in silos.

Today’s best practices suggest all collaborative environments, where Teams are not working in silos, they’re working side by side. The marketing people need to understand what the engineering people are doing, and the engineering people need to understand what the marketing people are trying to sell – in real time. And so it has to be a very collaborative work environment.

And the world of work as an industry itself is continuing to evolve. And it’s somewhat of an arms race. You can see it in San Francisco very clearly.

We’re out looking for space right now as an aside. And I didn’t realize how un-amenitized the buildings in San Francisco are. They’re no amenities! And the fact is the market has been so tight for the last five years that no one has spent the money to create that kind of environment. You’re only seeing a bifurcated environment where the only amenities out there now are views. And those offices that have views are 90 plus percent leased.

Everything else is considered a commodity office. And that stuff is 50% or less and will continue to trend down.

So I think, for example, San Francisco hosts an unbelievable buying opportunity where others might see a challenge. This is because – A – You can buy in on the cheap, and B – You can amenitize many of these buildings in a way where you don’t need views to be considered highly amenitized, because you can create your own views inside the building.

But I think you’re going to have winners and losers – People who buy commodity buildings on the cheap, just so they can have the cheapest rents out there, will be chasing rents down to a level that’s lower than their operating expenses. And those who can create highly amenitized space, won’t be competing on price at all.

The desires of the users are very different than they used to be.

Matt Ford: The arms race is a very good way to think about it, no different than coffee changing in the 80s or the iPhone in the 2000s – either you’re going to upgrade, or it’s soon going to be disposable. It’s just not going to be viewed the same way at all.

This trend has been happening for a while, but COVID-19 probably accelerated it. So yeah, you’re either an iPhone or a flip phone.

Barry DiRaimondo: There are a lot of flip phones out there, too. The reality is that 80% of the office stock is a flip phone.

A lot of people have moved to the suburbs. I think there’s an opportunity to take what we’re doing in some of the more urban environments and move it to the suburbs to create super cool mixed-use environments that presently don’t exist, that can tap into all the stuff that people are looking for and take advantage of the fact that people are uncomfortable riding mass transit into urban nodes. People are uncomfortable in specific urban nodes also because they don’t feel safe.

So you take the product to them instead of having them come to your product.

Haute Living: SteelWave is at the vanguard of evolutionary trends in commercial real estate. Seeing this marketplace in the wake of the great financial crisis, what were the motivations behind the launch of the digital investment vehicle as part of the SteelWave portfolio? And what is SteelWave looking to achieve in engaging the international community to get involved here in the US?”

Mitch DiRaimondo

Mitch DiRaimondo: We launched SteelWave Digital at a critically important and exciting juncture.

I was a crypto native. I started a hedge fund back in the day, trading volatility in crypto. And the one thing in the space that wasn’t there were real assets, real scalable assets that sovereign wealth, even institutional grade investors could step into.

So I stepped back, and I thought about what investors would be looking for – And they want real estate; they want high-quality real estate.

There were smaller outfits in the ether at the time tokenizing small deals, but there was nothing really to write home about. And with the artistic flair that SteelWave has, I envisioned launching a product that can fit and excel in this market.

That’s morphed over time. We initially thought we could go out and fund an independent deal, but the market’s not quite there yet. But we saw an opportunity to raise the fund internationally with like-minded individuals.

I really do think this is where the space is going, at least from the digitization side, and we’re pretty excited to be at the forefront of it.

Barry DiRaimondo: Every time there’s a massive fiat meltdown, whether it’s the GFC or not, people tend to lose confidence in the traditional financial ecosystem and tend to move to a different ecosystem. And we’ve seen this movement toward the digital ecosystem over the last five or six years. And it won’t replace the traditional financial system, it’ll just augment it.

And we felt like there was an opportunity to take steps to bridge a hard asset investment theory with the potential of fractional ownership. Investors from the U.S. and abroad will have the option to convert their traditional limited partnership interest into digital securities, at a point in time when the ecosystem has enough girth to give them secondary liquidity. They don’t have the obligation to do so, they have the option.

And it plays out today better in the international community, specifically Europe, Israel, and parts of the Middle East, which are much more progressive in their thinking about macro financial systems.

And that’s really why we’re pursuing the institutional investors in those locations more so than the US because these communities are more progressive.

And so far we’re gaining traction, significant traction in Europe, in Tel Aviv, and the UAE.

Haute Living: While from cursory due diligence, no one campus or property is alike, are there commonalities in the principles that SteelWave LLC brings to bear when coming onto a project? Are there principles in terms of integrating with the local community, principles in terms of commitment to the design process?

Matt Ford: You can’t buy your way into an authentic experience.

I mean, it may happen – You may have that one project where it resonates with the architects; they are able to see it through, and take completed ownership – but it’s hit or miss at best.

So the field is littered with folks spending as much money as anyone needs to spend but ending up with impressive sometimes even beautiful buildings with absolutely no soul.

The process is ultimately what makes the difference. But you have to be willing to fail. That doesn’t mean the project will fail, but you have to be willing to be open and ambitious, which sometimes doesn’t feel safe, but doing so with the understanding that you’re working with and trusting the best people you can surround yourself with. We’re doing that here.

 

Barry DiRaimondo: We don’t have one team; we have multiple teams, depending on where we are. And you have to have a team. You don’t want to reinvent the wheel every time, from a team perspective.

I mean, if you’ve got a handful of teams, and I’m talking about contractors, I’m talking about engineers, I’m talking about architects, and obviously the different SteelWave team members – it does take a while to get those teams functioning well together.

And they have to function well together. And to function well together, people must be open to criticism and trying stuff that sometimes doesn’t work.

You can’t have an ego. Everyone will be focused on trying to get to the end game, and different people may have different thoughts about how to get there. And again, some of the stuff you do is not going to work, so you tear it out and do it again.

You have to be prepared to say – “Wait a minute, this isn’t working. We need to change.”

And a lot of people are very resistant to doing so.

Our process isn’t for everyone. You just can’t pick any architect and any contractor out there and plug it into our process. Our process will drive them nuts.

And they’ll drive us nuts, and it just won’t work. So these relationships have been cultivated over the years.

Matt Ford: They’re strategic partners. They’re just right outside of our company, really. And we’re always adding to that, and tightening those relationships, and improving things, and spending a lot of time, quite frankly, investing in those relationships. But that’s what makes things magical.

Barry DiRaimondo: And everyone gets to celebrate the successes.

The teams we’ve built trust the process – because they’ve seen it work.

 

Written in partnership with SteelWave LLC