17th and Webster

17th and Webster

Commercial real estate developers Ben and Richard Weinstein don’t take a political view of their work. If they’ve managed to avoid a lot of the anti-gentrification scorn that gets heaped on developers, it’s not because they’ve set out to distinguish themselves as altruistic. The reason Weinstein Commercial Real Estate has done well in Oakland is a matter of taste.

“We think about what kinds of establishments we want to see around the corner and what kinds of places just won’t add anything,” said Richard. They said they get excited by distinctive projects led by interesting people who will make great tenants, like the guys at Stag’s, the pair behind Flora and the team behind Flight Deck. Richard and Ben are proud to house some of your favorite spots in Oakland.

In order to make my way into their office building on 15th and Broadway, I had to get past a few people hugging and greeting each other on the sidewalk like old friends reunited. Only once the group followed me into the building did I realize it was Richard Weinstein and West Oakland’s own Abeni Ramsey, of City Girl Farm. Abeni and her business partner are the Weinstein’s new tenants right down the block on 15th street with their soon-to-launch restaurant Township.

Before we got started with the interview, another tenant/neighbor wandered into the building explaining to Ben that he just came to chat. I assume this kind of environment is what they’re referring to when they fondly describe a sense of neighborly community.

17th and Telegraph

17th and Telegraph

“It’s not that we’re above doing a Starbucks,” said Richard, “but [big national chains] are much harder to work with and much less interesting.” He says the Weinstein’s biggest skill is tenanting, or the intuitive process by which they decide who to work with on a person-by-person basis. It takes a bit of business acumen and a bit of market analysis to predict if a venture will thrive or flop, but more than this, Richard says, they go with their gut when choosing partnerships.

“Ideally, the business is around forever,” he says, “so these relationships are long-term.”

Richard says it is rare that WCRE (formerly Citrine Advisors) has to pass up an exciting, community-benefitting venture in favor of some lucrative boutique. “When those come along, we jump all over them,” he said, citing some of their tenants like the non-profit performing arts space, Flight Deck, the East Bay Meditation Center, the Academy of Chinese Culture & Health Sciences and the charter school Envision Science Academy.
However, the burden is on those less lucrative projects to scrape together development costs by means of grants, loans and fundraising. For this reason, public/private collaborative initiatives have cropped up to help seed ventures raise the capital to meet developers half way. Pop Up Hood, the incubator, and Kiva Zip, the peer-to-peer lending program, are some local examples.
41st and Broadway

41st and Broadway

WCRE recently formed a partnership with Pop Up Hood for an incubator-like project on 17th and Webster. The incubator will house several independent pop-up ventures at a discounted rent.

They don’t see this as a values-driven project. “It’s an easy sell for us because it’s low risk,” said Ben, “either the businesses expand out or they fail to take off, in which case the loss is a portion of a few months of the total rent.”

“In most cases,” adds Richard, “you’ve got so much on the line, [huge construction contracts, investors, massive bank loans], that no developer is going to take on a project unless they can be reasonably sure of their returns.”
In order to grease the wheels of redevelopment, the city has a facade improvement program in which they cover half the cost of redoing facades– the program excludes neighborhoods that have been designated too lucrative to warrant subsidies, like Lakeshore and Rockridge. “There are so many projects we wouldn’t have been able to do without that program,” said Richard.

Flora depot, 19th and Telgraph.

Flora depot, 19th and Telgraph.

Ben and Richard lament the fact that, in most cases, their renovations make their numbers only when the incoming tenant is operating in a high-end market.
But ultimately, the Weinsteins take a positive view of the surge in day- and nighttime foot traffic downtown and the more ample tax base that comes along with economic growth. And they certainly take a positive view of the success stories of the individuals whose business dreams they’ve helped see through.
One thing the Weinsteins can attest to is the changing marketplace for Oakland real estate since the time they started up 30 years ago. Though they say there is still a stigma about Oakland held especially by non-local developers, the attraction is growing. With this desirability comes a shift in leverage.
Perhaps instead of the city sweetening the pot with subsidies for facade improvements, we will soon see developers being forced to sweeten the pot with community benefits.