Jamestown President and Director Michael Phillips joins Yahoo Finance Live to discuss the company’s decision to accept cryptocurrency as a rent payment.
– Crypto, which continues its march towards the mainstream, now has avenues available to use crypto for groceries, cars, and now, for rent. Property investment and management company, Jamestown, recently announcing that it will now accept rents in Bitcoin, Bitcoin Cash, even Dogecoin, all thanks to a partnership with BitPay. Joining us with others is Michael Phillips, Director and President of Jamestown.
Michael, great to have you on the show today. Michael, no one would ever be happy to pay rent, but it seems like a pretty interesting announcement. Are you doing this with BitPay because you got interest from renters saying I would actually like to pay my monthly rent in crypto?
MICHAEL PHILLIPS: Yeah, I mean, I think it’s topical dialogue for everyone. And certainly we have incoming requests to use alternative payment methods. And I think looking at how the world is changing, being able to use something like a BitPay tool to be a clearinghouse allows for a lot more versatility and a lot more fairness in the dialogue for people.
– So Michael, you know, my first thought when I read this is, well, it’s really interesting that you’re accepting rent payments in Bitcoin, but what about the volatility? And I wonder how you see this room. Obviously, you collect it. I mean, what is the process? Do you hold Bitcoin?
MICHAEL PHILLIPS: So for us, we will essentially receive the final down payment in the denominated currency that the lease is in. The BitPay interface allows users to pay in the crypto or tokenized payment system that interests them. And then there is a cash price and a distribution that comes back to us in the currency in which the lease is nominated. So basically it’s like a euro for $1 in terms of looking at things.
– So what’s interesting is that you kind of started that last answer by saying it depends on what currency the lease is in. Are you starting to see a trend in people who might want to 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 work. I mean, we operate in euros, pounds and dollars and a variety of currencies that fall under the jurisdiction of the country the asset is in, and that’s what the benchmark is. We have not received any incoming requests to have token rent structures as the base rental payment for them.
– Michael, while we have you here, I’d be curious to hear your thoughts on what you’re seeing on the market right now. Obviously, we’ve heard a lot, especially in the big city retail space, of people not necessarily moving back into offices, with some retailers sort of moving into those spaces. I mean, can you tell me about what you see from your perspective right now in the market?
MICHAEL PHILLIPS: Of course, I mean, I think around the world there’s a variety of different responses in different industry sectors, but we’re seeing on average in our major markets that around 65% to 70% of the population is returning at work in technology, media, entertainment, and creative fields.
Yes, there is full-time remote work on the periphery, but I think more of the norm is going to be shared. And we’re seeing some resistance to desktop sharing or hosting, but really, people want their space. They just want some flexibility on how they engage with it.
– And then, Michael, last question here. I just want to ask you about the properties you have. You have the Ballston Exchange in Arlington, very well known as a former resident of Arlington in the area. Now this is very interesting and very cool mixed real estate, where you have a mix of actual residents there in addition to commercial businesses as well. Has this changed? Is the demand for these types of properties different in the post-COVID era than before the pandemic?
MICHAEL PHILLIPS: I mean, I think it’s still a space, right? There are winners and losers more than ever. I think post-COVID, amenity, and engaged interest in places is where people want to be, and engaging people in that way is key. And I think there’s downward pressure on occupancy costs, so places that offer that amenity outside of their derelict premises are very valuable.
So we certainly saw these assets in our portfolio outperform. And I think the losers are commodities, single-sector products like regular glass and steel buildings from the 1970s or 1980s. mixed, and these seem to be in favor at the moment.