Impact

Eve Picker: [00:00:05] Hi there. Thanks for joining me on Rethink Real Estate. For Good. I’m Eve Picker and I’m on a mission to make real estate work for everyone. I love real estate. Real estate makes places good or bad, rich or poor, beautiful or not. In this show, I’m interviewing the disruptors, those creative thinkers and doers that are shrugging off the status quo, in order to build better for everyone. If you haven’t already, check out all of my podcasts at our website RethinkRealEstateForGood.co, or you can find them at your favorite podcast station. You’ll find lots worth listening to, I’m sure.

Eve: [00:00:59] Stephanie Blake is an historian at heart. That’s what she studied at Yale, much to her parents’ dismay. They didn’t understand how she could leverage history into a career, but she has in a big way. Stephanie leads a company that revels in enormously gorgeous and gritty, vacant buildings, the sort of buildings that most people can’t re-imagine to have any useful life today. 19th century post offices, millions of square feet of vacant commercial space and empty industrial buildings that all have a story to tell. Skylight Studios finds good use for those spaces, turning them into a branding campaign for their next act. What began as a small business creating temporary pop ups in unused spaces has become a very big one, with a non-traditional portfolio of venues where temporary can mean a decade. For Stephanie, there is always a story that will pave the way from old to new. You’ll want to hear more. If you’d like to join me in my quest to rethink real estate, there are two simple things you can do, share this podcast and go to rethinkrealestateforgood.co where you can subscribe to be the first to hear about my podcast, blog posts and other goodies.

Eve: [00:02:34] Hi, Stephanie. Thanks so much for joining me today.

Stephanie Blake: [00:02:37] Thanks so much for having me.

Eve: [00:02:39] So, you run a really fascinating and innovative company known for creating intentional short term real estate opportunities. Do you want to tell us what Skylight Studios is all about?

Stephanie: [00:02:53] Yeah, you know, Skylight Studios, we consider ourselves to be a creative place making and non-traditional venue development and management firm. And I think the two businesses are really linked because about a decade ago we started, really longer now, during the 2008 recession to sort of identify creative use for underutilized buildings. And I think by bringing in really interesting events and experiences with some of the most creative brands at the time, organically, we created a sense of place and identity for these buildings that jump started development investment. And we’ve seen that only continue in terms of the way the built environment just can’t keep up with how human behavior and the sort of cycles of.

Eve: [00:03:45] And viruses, right?

Stephanie: [00:03:47] Viruses, yeah. Exactly. Yes.

Eve: [00:03:52] How does it work? How does the business work?

Stephanie: [00:03:55] We were founded in New York City specifically because in sort of an urban environment. And back in 2008, there were so many incredible buildings that were sort of either historic or purpose built that didn’t have a use in sort of at that time, and so we really focused on adaptive reuse and looking at buildings and seeing why are they vacant, how are they so underutilized, and how do we partner with the owners of those buildings to both generate revenue but also create activity that enhances the community and provides a canvas for potential future tenants. So, I think that’s really mainly it’s a function of partnerships with the owners of buildings, often historic and underutilized buildings and Skylight having a vision around what makes the bones of a creative canvas. And then, throughout the year, as we’ve seen starting back in 2008, with fashion being sort of at its height in New York, seeing some of the creatives like a Ralph Lauren or a Chanel or any of these guys who are setting the tone for interesting experiences, who also appreciated history and architecture and something that others might see as just a dilapidated warehouse and celebrating that and putting investment against these ephemeral experiences, and from that they would set the tone and media and tech would follow and they would want to also create experiences. So, from that, we feel like we’ve created the sort of luxury shared economy where for a building that is interesting and an interesting canvas, you can achieve market rent or greater by putting together the best of industries in an environment that isn’t set up for necessarily even having all the power and the restrooms and the things you would imagine you need in a traditional venue.

Eve: [00:05:53] So how big are the buildings or the spaces that you tackle? Is there any typical?

Stephanie: [00:05:58] Yeah. You know, I think for us we do look at larger spaces, but I think it’s not a typical venue because we’ll do it in part. The High Line was an amazing project for us working on still today with four Freedom Park, the Louis Kahn Design Park on Roosevelt Island. It’s really about, we often talk about the third place. So, yes, it usually is 10,000 square feet or greater just because the types of events and the creativity and the experience of a space for us, be it for filming content or events, does require a bit of scale. We are looking for high ceiling heights, which is the interesting part about when we say adaptive reuse. These purpose-built buildings, whether it’s power plants or warehouses or post offices or printing presses, they’re meant for production, and the ceiling height and the materials used allow for both a sense of strength and of soulfulness, but also just purely from production, if you’re doing something in a temporary way, you want to create an incredible experience and it helps to have scale to do that.

Eve: [00:07:12] Let me back up a bit. So, these are short term events and do you pick spaces and find partners to activate them with or do you find spaces and talk to the landlords about the potential or do people with vacant buildings come to you or all of the above?

Stephanie: [00:07:30] Yeah, that’s all of the above for us. While our events are short term, our engagement is not short term, even if it might be an interim use. Often it might be five years, seven years with a lot of these projects that are stalled and looking to be jumpstarted through creative activation and revenue and to gain interest. So, Moynihan Station is a great example of that. Thinking about the middle of New York City and Midtown, the post office that was the sister building to the original Penn Station was vacant for 30 years and counting. A significant portion, probably 10% of it was still an active post office. There were leaks in the ceiling, there were cobwebs and pigeons all over the building and it’s 2 million square feet that’s just vacant.

Eve: [00:08:19] Wow.

Stephanie: [00:08:20] And you needed $10 million to even begin to make it into something that a standard tenant would take on. The carrying costs were significant and we walked in and we lit up and it was the skylights and the nature of the sort of black resin floor where 80% of the mail would come across from Europe and it was black so that you could see the mail that would fall on the floor and you had these catwalks before there were security systems where people would sit up in these catwalks and this 60 foot ceiling and look and watch people sorting the mail to make sure that no one was stealing anything and it was being done the way that is expected. And to have that and recognize the creatives we work with, we move New York Fashion Week from Lincoln Center there because the designers that want to create these experiences that feel otherworldly, they really appreciate the history and also the nature of what that building was. Buildings aren’t built that way anymore. And so, for us, you know, we came in, we created a short term event venue, but it was over the course of five years and counting. And to this day, they credit Skylight moving New York Fashion Week, bringing through the Anna Wintours, doing things with, you know, Hermes and the Whitney Museum and Edible Schoolyard and all of these things just to bring an audience and exposure. And also, you know, we generated over $17 million and so for Vornado and related to them come in and see the investment and for them to restore the skylights in a way that originally, they thought they were going to just rebuild. It was just a very interesting arc to then also, as Vornado’s doing this $3 billion redevelopment Skylight has come back in, Vornado tapped us to think about how can we continue now that they actually have redeveloped and are launching? We have two venues that will be operating and we’re also the partner to think about interesting programming to help keep that redevelopment vibrant and the future of work and sort of what that can be to Midtown requires more than just the materials and an incredible architect to design spaces. You need that heartbeat of what actually keeps these spaces active and interesting and engaging.

Eve: [00:10:40] It sounds like your role is unexpectedly become historic renovation advocate as well.

Stephanie: [00:10:48] Yeah, I like that term. We often consider what we do to be urban archaeology because I think we’re sort of seeing these buildings, understanding how they were built, how incredible the bones are and the stories of why and how they were built and what they meant to the city and bringing them back into today’s context and through.

Eve: [00:11:12] Fascinating.

Stephanie: [00:11:13] Yeah, I think we have a real a deep appreciation for history.

Eve: [00:11:17] It sounds like it’s so just run through for me. What type of vacant spaces do you tackle? Like, how big is the range?

Stephanie: [00:11:24] Yeah. It ranges from, you know, 10,000 square feet to millions of square feet, I think, at this point we have a 32 acre district that we work with in downtown L.A. Obviously, the post office Moynihan was 2 million square feet and counting. Thinking about some of the parks that were brought into, I think that, you know, we’re working with Ford on the revitalization of Michigan, Central and Detroit. I think that a lot of these projects I think what I was starting to say earlier around the third place, you know, especially coming out of COVID, we’re very aware of the first place being your home, the second place being where you go to work and these third places are not defined for us as a culture, as a society. And I think they can be parks; they could be libraries maybe once upon a time they were the mall. And I think it fuses sort of entertainment with community and art and culture and music and the different things that bring us together. And I think more than ever, a lot of developers, landlords, cities are focused on how do you make sense of this third place? What does that mean for vacant retail, for the future of malls, for even the way people are questioning office and how and why and when we come together? And so, I think a lot of what Skylight looks at and the reason I think our spaces have gotten bigger and even more interesting is because it is what is the third place when you have a district, how do you think about the negative space, the walkways, the common areas, the outdoor environment that might be the quad between your retail. So, I think we like to think of what we do as not just being confined to a specific building or 10,000 square feet, but truly how do we think about the sort of master operations of a district or a neighborhood? And how do we connect the public space to the private space, to the retailers, to the SMB in a way that can be fused through intentional programming and experiences?

Eve: [00:13:28] So you really are urban design strategists. That’s really what it sounds like. How do you interconnect everything in the environment?

Eve: [00:13:35] I think we work with a lot of experts in different fields and whether they are urban planners or economists or the bid or the Economic Development Corporation or architects. And I think a lot of these experts help inform our activation strategy where we see so much value and bringing expertise to the table. But ultimately, I think what we’ve organically evolved into is to your point, that of these urban planning sort of activators, if you will, because I think that as we’ve seen between technology, these viruses, all the things in which has just sort of sped up the world and how we interact and our expectation of space and environment, the built world just can’t keep up. And so a lot of the experts and a lot of the things that are static and built can’t keep up. And so I do think our role is to think about how everything from in real estate, where everything has been about these traditional asset classes and these types of uses. And then when you think about on the flip side, the idea of urban planning and it’s meant to be built in a sustainable way and last for decades, but our behavior is changing quickly. So, I think it’s Skylights role to interpret and take in information and allow for a program that helps adapt and change and that that really is events and experiences in a way that maybe even five years or ten years ago, events were seen as a very superficial thing. But now I think it’s truly a fundamental part of our society and the development of the built environment.

Eve: [00:15:19] So the big question I have is, is does the ultimate post-event goal differ for your clients or you? I mean, do you have different end goals in mind?

Stephanie: [00:15:30] I think we do. But I think ultimately there is this concept of all ships rise with the rising tide and the idea of even there is a disconnect between a landlord’s goals and the retailer who or the tenant who’s filling their space but if you’re choosing to be in a space because of the neighborhood, because of the architecture, because of the design, because of the demographic that’s there, it works. And I think we’ve seen more and more a lot of brands and activations be a way that creates community. The goal for product driven brands is to create loyalty from their customers and I think honestly, a big part of Skylight has been finding that common ground between the city officials, planning, the police department, the fire department, the landlord and the brands. And I think there’s common ground to be found because when you create a great experience, it helps everyone. And I think there’s a pressure on brands more than ever to have a mission to do good in the world, and I think that falls very nicely in line with generating community and thinking about a neighborhood and that the experience is not just slapping up your logo and showing your new shoes, it’s the story. And that’s the stuff that resonates with people and humanity generally. And I think the storytelling through events is something that you can find the right thread and it can be very powerful to identify that common ground in terms of how are you playing a role in revitalizing this neighborhood and establishing community, and where does your brand story fit into that?

Eve: [00:17:07] So do you think your model can help to rescue the central business district, which is facing an existential crisis right now? Like we’re thinking about entire places, not just buildings, right, that are looking pretty vacant and have to really think about how to reinvent themselves.

Stephanie: [00:17:26] Yes, I do think it’s a big challenge and I think it’s very dependent on the buildings and the way a central business district might be set up for us we’ve had interesting experiences in Chicago with the Board of Trade Building, having these trading floors that are 30, 40 foot ceilings, 30,000 square feet, and when you have that, we could do interesting things, not just trying to repurpose ten foot ceiling height.

Eve: [00:17:57] Right.

Stephanie: [00:17:58] Old eighties offices. I think there’s different ways to think about Skylight being a catalyst for what is the future of some of this vacant office space and how do you still draw people to it? And if there isn’t the triple net ten-year lease, how do you think about why companies are bringing people together and can you create spaces that can be shared and still draw people to that space, which then allows for the other businesses that exist, be it the cobbler or the Sweet Greens or whoever needs to be patronized by the office workers. So, I think there’s some ways we’ve thought about that and depending on the physical bones of the buildings in that area, I think we can play a role in that. I think it’s different than the plight of retail and malls, but I think there’s some similarities there where I think just the expectation in the use of physical space is changing. And I think there’s been an understanding for a very long time that it is traditional, it’s one use, it’s a restaurant, it’s an office space, it’s a brick-and-mortar store that just sells what’s coming out of its inventory there. And I think the world is changing and I think entertainment experience work, all of that in combination with content creation and the digital footprint against the physical is an important formula for central business districts, because I think there’s an inherent challenge. I don’t think they can stay static and just be revitalized with the existing mix of types of businesses, particularly for some of the less interesting central business district where they don’t have a historic, beautiful building or they don’t have the bones, they’re very sort of built for what was meant to be there, which is you have your cubicles, you have your office, you have the smaller retail down below, and I think with that, it’s taking a more holistic view. I think that’s also a big thing we’ve seen that can be a factor is how do the landlords come together? Like what’s the role of the bid? Or does a landlord come in and swoop up a significant portion of real estate so that they have a more cohesive approach to the tenant thing, to the community, to what’s happening there? I think we’ve seen that be a pretty big factor in where even where Skylight can make a difference or not.

Eve: [00:20:24] You were involved in the remaking of Bleecker Street, which sounds really interesting because I think there were financial aspects for how that street came back that also play a really big role. So that that was five blocks, right, a five block street that was in pretty bad shape. What happened there to bring it back?

Stephanie: [00:20:45] Yeah, I think that’s a great jumping off point because it was Brookfield coming in and purchasing a number of those storefronts and providing that sort of overarching opportunity to not just have one storefront but multiple across these few blocks. And I think Bleecker Street was always, in terms of the corridor and the West Village and having this sort of sense of being a charming place where you have discovery and surprise and delight, as it became more successful, and landlords saw they could increase rents and they could take the stores that could pay top dollar and Fifth Avenue and put them there. You know, the community and the neighborhood, it was disconnected with its identity.

Eve: [00:21:32] No more surprise and delight, right?

Stephanie: [00:21:35] No more surprise and delight, exactly. And so, I think as vacancy increased and it was recognized that these stores, even the big box, the one the ones that were very well resourced, it didn’t make sense for them to stay open. It made more sense for them to even hang on to their lease, but not to staff it, which is a crazy challenge. And so I think Brookfield really saw an opportunity as place makers and part of that sort of ethos to shift that and take a chance, and so I think by taking five storefronts and working with a firm like us, it was very much to think about not just filling the stores, but also how do we create sort of a sense of community and programming on that street to bring back the legacy of what Bleecker was to the beatnik poets, to the days of Kerouac, to the music, to all of those pieces. And think about also what is the future of retail and how do you take some of these digitally native brands and give them an opportunity? For Skylight I think we were very thoughtful around even thinking about mentorship. So, the stores that had survived and that were there, why did they survive and how can you create a community and a platform between these digitally native brands and those that had been there that were really based in brick and mortar and have connectivity? And it was successful in that, it became self-sustaining. So, once we connected these different brands with one another, and I think that’s where the special sort of connection happened, was just not only to be thoughtful about who you were trying to place there, but also how did they jive with the existing stores there? And how do you create a program for programming and experiences and activation that allow these brands and companies to get a jump start in terms of seeing how programming on the street and doing things together can actually drive traffic and sales. And then once Skylight, once we set that program, they got it and they were able to continue that level of programming to today, and I think that’s been a huge success for them.

Eve: [00:23:49] It sounds like a really interesting model that might be used in other places. You know, as we see a lot of vacancies in in retail strip districts, main streets.

Stephanie: [00:23:59] Yeah, I think it’s definitely the West Village is a really you know, we had a lot to work with. I think when you think about some of the other districts, I do think community and a platform that really creates a shared sense of responsibility and also a shared customer or shared approach because I think that there does need to be some structure, even though everything can and will and should be hyper localized, I do think there’s a formula around how to give tools and resources to these sort of retail districts and help them move into a space where they can meet the consumers the way that the landscape is changing.

Eve: [00:24:42] So what about big tech? Have you worked with Big Tech at all and what are they trying to accomplish?

Stephanie: [00:24:51] Yeah. I think, you know, we have worked with all of the big tech. And I think it’s really interesting to see their emphasis on short term experiences and being able to sort of experiment and build on proof of concept. I think similarly to how we were just speaking about the built environment not keeping up, I think Big Tech is aware of a lot of what they’re doing digitally, and in the cloud, but I think ultimately they recognize that we’re human beings with bodies and need to also come together around what big tech is doing. And I think whether it’s Netflix, right, they are content platform, at the same time, I think the number of experiences that they’ve launched in person shows the value that they see in creating loyalty and experiences around their shows and connecting fans with one another through physical experiences. I think similarly in the work we’ve done with Meta and with Google and Amazon, events foster these moments that are memorable, that I think as humans, nothing can be replaced with what you experience online, with what you might experience in person, and so I think creating a level of engagement and identity, I think Big Tech is really aware of the importance of events and experiences and the in-person value against the platforms that they’ve created in the digital space.

Eve: [00:26:34] Is there any backlash to brand bankrolled community space and how do you engage a community that’s already there?

Stephanie: [00:26:44] Yeah, I think that’s a great question. I think that ultimately, as I’ve seen, you know, even sitting in my small city that I live in now, I sit on the advisory committee to city council on setting the general plan for the next 20 years, and cities and politics is very, very slow and hard to get things done. I think the beauty of some of these bigger brands with the right intention is that they can be these 21st century patrons of community, of the arts, of these spaces. I think there’s a lot of ways that Skylight has structured things to allow for the sort of VIP, the product launch, but then also community programming and educational programs that come from that. And I think there can be the same level of investment that gets amortized over the course of a couple of weeks, where initially there is this big experience that is for their top clientele or for the creators that are part of their network and all of that. And then to think about that same build and that same experience and how to translate it. I think there’s also a lot of ways that we look at a full calendar year or five years of a project where these brands come in and they are the ones paying and subsidizing for the community driven programs. So, if you’re thinking of a lot of our model at Skylight, is this sort of lower frequency, high caliber where you have maybe 25, 30% of the calendar year filled with the stuff that provides that revenue stream and also provides the investment to then work with the community. And I do think that there is this focus on an overused authenticity or honesty around what you’re doing as a brand and as a developer and there’s so much more of a spotlight, even from the community, to have a voice and what that looks like. And so, I do think generally, yes, gentrification is not going to go at any time, you’re redeveloping, you’re doing something. But I do think there’s a way to be really thoughtful around the brands, what they’re doing, how those dollars get reinvested and creating a place for the community and continuing to work with the existing organizations that have been a part of that community, the artists, the various non-profits that have played a role in whether it’s education, the schools, all of that to integrate in a calendar that does feel like it’s addressing all of the different parts of a community.

Eve: [00:29:18] Little authenticity. So, what’s your story? I mean, how did you get from Yale to here?

Stephanie: [00:29:27] Um, you know, I was a history major, and I think I’ve always had an appreciation. What?

Eve: [00:29:34] Yeah, I said, well, that fits the history, Major.

Stephanie: [00:29:40] It does it. And it’s so interesting because I could have never predicted from being a history major at a liberal arts school that this would become sort of my my path. But I did, and my parents actually, they are they grew up in Jamaica. They’re immigrants who sort of really self-made but felt really strongly that history was not a super useful degree. And when I was graduating and I was offered a job at Google, that was a great opportunity, even though I didn’t understand, I mean, Google explained that they don’t hire people that necessarily have a tech background or know what to do in this sort of framework but they just want smart people who can think, but I think my parents were very surprised and excited that that was a transition from history major. And I think being at Google, it was an incredible environment to learn a lot and to understand the tools that are being used and the sort of digital space and sort of the software and the. For me, it felt so intangible. But to understand how this platform was created around something that I couldn’t touch, see, feel or really understand, and I think I struggled with that, even though I was really grateful and excited to be part of something at a time. You know, this is 2005 where it was changing rapidly, and it did feel like it was truly the pioneering thing that was changing the world and being around other people who were so smart and innovative. But I think I always knew that being in a physical space design, how the built environment really affects your mood, it affects how you connect with people. It’s just end of the day, I just I feel so much that we’re physical beings and the built environment is a really important piece of how we see the world and how we connect with one another and so, it was just an interesting opportunity that a good friend of mine who was at Google said, Hey, I met this woman who’s doing this interesting thing in this warehouse and we were going to do something there for YouTube. At the time, a YouTube had just become a part of Google, and I met with them, and one thing led to another and I helped think about how space and the creative nature of a lot of these companies building things in the cloud and how that revenue stream can really help with the revitalization. And I think that at the time it really wasn’t more than thinking about vacant space and creative experiences and having a revenue stream that could help float these spaces in the interim pay for offset the cost of just the carrying costs. And I think it really evolved into understanding the power of these types of experiences, the way that these big companies thought differently about short- and long-term investment in space and the value of that against saturation of the digital space.

Eve: [00:32:37] That’s interesting.

Stephanie: [00:32:38] And I think today it’s interesting to see it in the way that I can see real estate, almost as in my head. It’s very bizarre, but I do see it almost as like the search function of you have your ads on Google and they enable the search platform. I think there’s a lot of controversy of how much can you tell between ads and the actual search results these days but, I do think there’s a lot of value in thinking about, to your question earlier, how these big companies and brands can affect the quality of the built environment and how they can help fund that shift, and I don’t think that the traditional model of just the landlord tenant relationship across all of these spaces where they are purpose built for one tenant and one use is the future. And so I think it’s interesting to apply some of the ways that I think being at Google in those sort of early days of my career and seeing how they were thinking so differently about this sort of space in the cloud could be applied to the built environment.

Eve: [00:33:42] So I’d love to know what services you don’t provide yet that you’re thinking about or how you’d like to grow this company. Because it seems like you must be getting bigger pretty quickly. What are you thinking about? Where else can this go?

Stephanie: [00:33:57] Yeah, I think the primary use of our portfolio these days is twofold. It’s really offering location based, interesting environments for film and content, and that’s often sort of the easiest way to go into. We have this 800-acre active steel manufacturing plant off of Lake Ontario or the power plant sitting on the Pacific Ocean in Redondo Beach. And that’s something that I feel with the amount of dollars and the craze around the white-hot market that is studio, there’s still a significant amount of content and film that’s done outside of the studio. And so, I think identifying these really amazing assets for as film and content locations is something that I think could grow very quickly for us, especially because you can repurpose the workforce. The workforce that was part of the steel manufacturing plant can be the workforce to make this a content environment. And so, I think that’s been really interesting and I think offers up a lot of different environments across the world for Skylight to go into. And I think additionally thinking about this place and Skylight being the operator of the third place, I think there are so many amazing historic buildings and spaces, museums included, who are starting to struggle to come into their identity as the world is changing and technology is changing, and all the immersive experiences are all of the sort of trend. And how can Skylight identify how to increase revenue streams and direct dollars, given that a lot of the biggest brands spending the most money on these creative experiences trust our vision. And so in my ideal world, we would look to identify existing businesses even that we can help amplify and add to not just these sort of underutilized buildings and I think that’s a huge opportunity for expansion for us, is to take some of the trends where we see whether it’s Netflix or Google or these companies creating experiences, how could we layer them into existing business models and existing uses like museums in a way that museums have been so thoughtful and evolving also and doing very creative exhibitions and installations. But I think the dollars I think we could help bring the dollars and connect the dots in a way that hasn’t been done yet.

Eve: [00:36:20] It sounds fabulous. And I thank you very much for joining me. I really enjoyed the conversation.

Stephanie: [00:36:25] Well, thank you so much for having me. It was fun to talk about.

Eve: [00:36:43] Buildings is branding, buildings to tell stories, buildings to make places. Skylight studios take storied and important buildings and reinvents their future quickly while the expensive and permanent redevelopment process churns on in the background.

Eve: [00:37:18] You can find out more about this episode or others you might have missed on the show notes page at our website RethinkRealEstateForGood.co. There’s lots to listen to there. A special thanks to David Allardice for his excellent editing of this podcast and original music, and thanks to you for spending your time with me today. We’ll talk again soon, but for now, this is Eve Picker signing off to go make some change.