Jamestown President & Principal Michael Phillips joins Yahoo Finance Live to discuss the company’s decision to accept crypto currency as payment for rent.
– Crypto, which is continuing its march into the mainstream, avenues now available to use crypto for groceries, cars, and now, for rent. Real estate investment and management company, Jamestown, announcing recently, it will now accept rent in Bitcoin, Bitcoin Cash, even Dogecoin, all this through a partnership with BitPay. Joining us with more is Michael Phillips, Jamestown principal and president.
Michael, great to have you on the show today. Michael, not that anyone would ever get excited to pay rent, but it seems like this is a pretty interesting announcement. Are you doing this with BitPay because you’ve been getting interest from people who are renting that were saying I’d actually like to pay my monthly rent in crypto?
MICHAEL PHILLIPS: Yeah, I mean, I think this is a topical dialogue for everyone. And certainly, we’ve got an inward, inbound requests to use alternative forms of payment. And I think as we look at how the world is evolving, being able to use something like a BitPay tool to be a clearinghouse allows a lot more versatility and a lot more equity in the dialogue for people.
– So Michael, you know my first thought when I read this is, well, this is really interesting that you’re accepting rent payments in Bitcoin, but then what about the volatility? And I wonder how you’re looking at that piece. Obviously, you’re collecting it. I mean, what’s the process? Do you hold in Bitcoin?
MICHAEL PHILLIPS: So for us, we essentially will receive the ultimate payment downstream in the currency denominated that the lease sits under. The BitPay interface allows people to pay in the crypto or token tokenized payment system that appeals to them. And then, there’s a spot pricing and distribution back to us in the currency that the lease is nominated in. So essentially, it’s like a euro to $1 in terms of how we look at it.
– So what’s interesting is that you kind of began that last answer by saying it depends on whatever currency the lease is denominated in. Are you starting to see a trend in people who might want to actually sign a 12-month lease that says I will pay my landlord in Bitcoin Cash for example?
MICHAEL PHILLIPS: Yeah, that’s not how we’re operating. I mean, we operate in euros and pounds and dollars and in a variety of currencies that are jurisdictional to the country that the asset’s in, and that’s what the reference point is. We haven’t had inbound requests to have tokenized rent structures as the base lease payment for them.
– Michael, while we have you here, I’d be curious to just get your thoughts on what you’re seeing in the market right now. Obviously, we’ve heard a lot about, especially in the commercial space in major cities, people haven’t necessarily returned in offices, some retailers sort of moving in on those spaces. I mean, can you talk to me about what you’re seeing from your vantage point right now in the market?
MICHAEL PHILLIPS: Sure, I mean, I think across the globe there’s a variety of different responses in different industry sectors, but we’re seeing on average in our major markets about a 65% to 70% population back to work in technology, media, entertainment, and creative fields.
Certainly, there’s some outlying remote work full time, but I think more of the norm is going to be shared. And we’re seeing a bit of a resistance to desk sharing or hoteling, but really, people want their space. They just want some flexibility about how they engage with it.
– And then, Michael, last question here. I want to ask just about the properties that you have. You’ve got the Ballston Exchange in Arlington, very familiar as a former Arlington resident in the area. Now, these are very interesting, very cool mixed real estate pieces of property, where you have a mix of actual residents there in addition to commercial businesses as well. Has that changed? Is the demand for those types of properties different in the post-COVID era than it was pre-pandemic?
MICHAEL PHILLIPS: I mean, I think that it’s still a space, right? It’s the winners and losers more so than ever. I think post-COVID, amenitized, engaged interest in places are where people want to be, and getting people engaged in that way is essential. And I think there’s downward pressure on occupancy costs, so places that offer that amenitization on the outside of their demised premise is very valuable.
So we’ve seen, certainly, those assets in our portfolio outperform. And I think that the losers are the more commodity, single-sector products like plain glass and steel buildings from the 1970s or ’80s. But from our standpoint, we’ve been a long believer in highly amenitized, integrated, mixed-use assets, and those seem to be in favor at the moment.
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