Inside an old brick warehouse with arched windows and a white smokestack rising above the Georgetown skyline, Max Kirschenbaum explains a pop-up trend that the real estate firm WestMill Capital wants to bring to Washington.
Warmly dressed in a brown jacket and red scarf, he walks with caution so as not to step on construction tools, power cords and wooden beams spread out on the ground.
In just weeks, WestMill will launch
Rise Events Corp. The purpose: to rent WestMill's vacant spaces -- like the Powerhouse, at 3255 Grace St. NW -- until the properties are sold or leased.
"It takes at least a year where nothing happens," Rise Events co-founder Dan Miller says about the time it usually takes his company to process all the paperwork. "So we've been spending about the past 18 months thinking about, 'What can we do in that inter-period to use the space?'"
In an economy where banks are hesitant to lend money to urban construction projects, and when every day a building remains vacant costs the developer money, Rise Events is a new model. It will allow the developers to earn money and use their unoccupied properties during the leasing, permitting, and building process.
Unlike some D.C. developers that have followed the 'buy low, sell high' approach -- buying a property and holding it until the market is right -- the Millers are using their properties almost immediately after purchasing them.
"We thought it would be great to find a way to allow tenants to kind of showcase test concepts with pop-ups," Miller says.
For the last six months, he has been exploring Washington's city laws -- particularly permits and business licenses -- with the company's architects and engineers to set up the system for the new venture.
"[We'll] run basically what we call 'event space,' where people can rent out our spaces," Miller says. "Allow local entrepreneurs and businesses to test concepts." Starting mid-January, three of WestMill Capital's properties -- the Powerhouse in Georgetown, the future Maketto on H Street NE, and a building in Shaw -- will be available through Rise Events.
Although the pop-up trend in D.C. has been lukewarm, Roger Whyte, Rise Events' event manager, believes D.C. is entering into its own "event renaissance." Whyte, who's been producing weddings and political conferences for the last ten years, says the search for venues within the city will make initiatives like this one stand out.
"I've had planners from New York City, Boston and L.A. come and walk in the space and say 'this is what we've been waiting for in D.C,'" Whyte says about the Powerhouse. He adds that while other major cities have led in this type of business in the past, the District's fast-gentrifying wave is making the city a hot spot for events.
"I've had planners from New York City, Boston and L.A. come and walk in the space and say 'this is what we've been waiting for in D.C.'"
"D.C. is one of those cities that has great events, has huge events, but doesn't have some of the venues that it needs or that it wants," he says.
The Georgetown Powerhouse's 8,000-square-foot space sits across from the C&O canal, close to bustling shops. But the initiative is not without hurdles. WestMill Capital's other vacant storefronts (on H Street and in Shaw) lack the city's requirements to be used as event spaces.
"But they're fantastic office spaces," Miller says, explaining that he has talked to potential office tenants searching for temporary locations.
"We're going to open up our spaces"
The Millers' other venture, Fundrise, has become the brothers' main vehicle for their retail-focused development in the nation's capital. Fundrise collects investments for development projects from individual members within a community, and, if the projects are profitable, gives them back financial returns.
According to the Fundrise website, the 1351 H Street NE building – one of the three spaces to be offered by Rise Events -- received $325,000 in three months from local investors to renovate the property.
The Shaw location, 1539 Seventh Street NW, was purchased in November at $852,000 and brokered by Lincoln Property Co. More than "six figures" have been invested in restoration at the Georgetown Powerhouse.
Miller says he's thinking of applying the crowd-funding approach with Rise Events, a move he hopes duplicates the success he's had in 2012.
"In the same way we look at the crowd-funding aspects of the real estate world,” Miller says, "tenants could play around with the crowd-funding aspects of the use of the space," so that a pop-up tenant could also be crowdfunded, for example. "We’re going to open up our spaces and see what the benefits can be."