Correction:

An earlier version of this story incorrectly named Marc Deluca, managing director of Clarion Partners. This version has been corrected.

StreetSense: The hometown firm with a big say in what’s hip in Washington

Jeffrey MacMillan/JEFFREY MACMILLAN FOR CAPITAL BUSINESS - Marc Ratner, chief executive of Street Sense.

For every celebrity chef, fashion designer and pop-up retail concept that comes to Washington in search of hip young consumers, someone has to decide whether the concept belongs in Georgetown or Shaw, H Street or Columbia Heights. Someone has to decide which of the original bricks and beams will be exposed in the new bar or restaurant. Someone has to design the logos that will adorn the sign out front, the napkins, the coasters, the Web site, the Twitter account.

Increasingly, many of the people behind these decisions work in the same place: the eighth floor Bethesda offices of Streetsense, the homegrown firm that considers itself the finder and decider of what’s cool and what’s going to be cool in Washington.

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Streetsense didn’t come from New York or some other culture capital. It was born in Silver Spring, where co-founders Marc Ratner and Guy Silverman went to Springbrook High School. Founded in 2001, the company is playing a major role in creating and shaping the retail and restaurant concepts that are spreading like so many bicycle paths through inner city Washington neighborhoods.

Streetsense grew from the idea that a retail firm could break the mold of only providing one service to clients, either help with leasing or architecture or planning or media strategy. Streetsense wants to do it all.

“We’re all strategists at heart,” Ratner said. “There are great planning companies out there, there are really solid brokerage firms and there are really good creative agencies. But when you take all of that and root it in a core vision, that’s us.”

Ratner, Silverman and their partners have convinced some of the biggest names in retail and hospitality that they are the ones to turn their project into the next big thing. They are working for famed Graffiato chef Mike Isabella; for the Ritz-Carlton in Europe and Asia; and for Ivanka Trump on her Old Post Office redevelopment. Streetsense, Trump said, “has a really good sense” of the needs of gourmet restaurants and high-end retailers in Washington and elsewhere.

Now they are opening new offices in Bethesda, the District and New York. How did a team of trendsetters come from the suburbs of gray, government-obsessed Washington?

‘A thinker’

Ratner has never played it safe. A class clown in high school, he left the University of Maryland before his first class began and spent a year traveling with hero and famed drummer Buddy Rich. Ratner drove a tour bus, hung out with groupies, learned about music and eventually realized he might want to give real estate a try.

In the 1980s, he started working in construction, then property management and began brokering retail deals with partner Bart Eisner. He spent 13 years doing leases for retailers including Best Buy, Target, Bed Bath & Beyond, Today’s Man and countless restaurants. Now 48, he estimates having negotiated 500 or more retail leases in his career, but he isn’t necessarily proud of it.

“I don’t want to be a broker,” he said. “I wanted to be seen as a consultant, as a thinker.”

He kept coming back to business ideas that he and Silverman, his friend from high school, had developed for a company that would distinguish itself from the long-held model of brokerage firms as unimaginative conveyer belts for lease and sale transactions.

Explaining this to clients, who were used to hiring a broker for leasing work and an architect and planner separately, was not always easy. “We had a hard time because people would say, ‘Are you a broker? Are you an architect? What are you?’” Ratner said. “We were struggling with being pigeon-holed as a broker company.”

In 2004 they had a breakthrough. At the conference of the International Council of Shopping Centers in Las Vegas, the Peterson Cos. were plotting National Harbor and looking for retail planners. Ratner successfully pitched Streetsense. “They were full of guts and determination,” said Jon Peterson, senior vice president at Peterson.

When the economic collapse arrived, however, hiring all that planning staff didn’t seem so smart. Many of Ratner’s long-time clients were pulling back, and the firm’s large architecture and planning staff — built to attract work for town center projects in Fairfax and Loudoun counties — watched those projects stall or collapse.

Furthermore, the recession had a more immediate effect on Streetsense than many real estate firms because all of its business was earned from fees — there were no physical assets to sell to raise cash. Streetsense shed roughly 40 percent of its staff. “The world was upside down,” Silverman said.

‘They understand me’

In 2008, with the economy reeling, Ratner and Silverman, along with partners Jeff Pollak, Lee Engle and Bruce Leonard, gathered in Ratner’s Potomac home to figure out their next course. They came to two conclusions: First, real estate would come rushing back to the urban core. Second, the next wave of consumers — the millennials — weren’t going to be interested in showing off their newest purchases as much as they would be in search of an experience, a unique trip to a restaurant, a bar or even the barbershop.

They left the meeting with a plan to not only rebuild the company’s architecture business, but to also offer a menu of services that could fit either a big corporation or an entrepreneur with an idea. Streetsense’s creative services division, for instance, offers branding, naming, packaging, Web design and social media services. The company wants to have a hand in every aspect of a concept, from the sign out front to the menu customers are handed when they take a seat. The lease is just one piece.

One of the first people to take a chance on the new Streetsense was Isabella, the former “Top Chef” contestant whose Penn Quarter Italian restaurant Graffiato had become a hit. When it came time to open a second D.C. restaurant, Isabella hired Streetsense’s architecture and design teams to help create Bandolero, a Mexican-inspired restaurant in Georgetown.

“They do a good job of capturing my vision — they know what I want and how I want it,” Isabella said. “They just understand me.”

Vik Singh was a construction executive when he first heard about Streetsense in early 2011, during his search for a location for a fast-casual Indian restaurant. He’d spotted a site in the Hyattsville Arts District that was being rented out by Streetsense.

“And then I found out that they do pretty much everything,” he said. “We could lease it from them and they would design it, help us with construction, marketing, branding. It’s much easier to deal with one point of contact than with five different people from five different firms.”

It took a little over a year for everything to come together. Streetsense helped Singh pick out the restaurant’s color palette — deep reds and yellows — and designed its logo. They chose a deep blue paint for the eatery’s walls and red cushions for its chairs,

“It saved me a lot of time and headache,” Singh said.

Spice 6 opened its doors in May. All told, Singh says he paid Streetsense about $60,000 — 10 percent of the project’s total cost — for architecture, design, marketing and branding services. He says he thinks he paid more than he would have had he chosen five different firms for five different tasks, but that it was worthwhile.

“You have to think of it as time is money,” Singh said. “And you’re saving time by not dealing with multiple people at multiple times.”

Taking on too much?

Competitors say that by offering to be everything to everyone, Streetsense risks spreading itself too thin.

“What they’re trying to do has been tried before in different genres,” said Bill Miller, principal of Miller Walker Retail Real Estate. The question for clients, Miller said, is whether they want to hire one shop to do everything rather than specialists for each service.

“It typically is not possible to be the best in every discipline,” he said. “Do you take the potentially mixed bag of all services or do you seek out specialists in each service line?”

Ratner said the company has been profitable in every year except for 2009, and that it grossed more than $10 million in 2012, when it had about 80 employees. If he and Silverman have any ideas about slowing down, however, they aren’t showing it.

Ratner said the company has just inked a deal to move from its current 9,000-square-foot offices in a Bethesda office building to 20,000 square feet in a former food court nearby. Expect an engaging street level experience akin to the one they designed for LivingSocial on F Street.

“We’re interested in spaces that evolve — something that could hold a kitchen demonstration one evening and change into a yoga studio tomorrow morning,” said Herb Heiserman, managing principal of Streetsense.

The next step is New York, where Streetsense has already established connections in Brooklyn and Manhattan.

“As we move from being a regional company to a national company, New York is our gateway,” said Brian Taff, the company’s chief operating officer.

Streetsense is also adding new services. Silverman spends most of his time heading up a development arm, one that scored its first major deal recently when it was named to build the Gateway Arts District project in Mount Ranier.

Ratner would like to become equity owner of some of the concepts he helps build from the ground up (Streetsense Capital) and is planning a media wing as well. He said the need for a broad array of services is demonstrated in projects such as its $34 million renovation of Chevy Chase Pavilion, one of his top accomplishments to this point. Clarion Partners, the center’s manager, interviewed five architecture firms for the work; each proposal was essentially the same, with talk of swapping out flooring and painting the walls.

Then Streetsense came in with plans to remove the property’s atrium, scrap the existing floor plan and add a sweeping 30-foot-by-60-foot LED wall.

“Everybody else was taking the existing guts of the property and just putting lipstick on the pig,” said Marc Deluca, managing director of Clarion Partners. “But Streetsense came in and said, ‘You have a pig. Let’s turn it into a prized pony.’ ”

The mall is slated to reopen later this year, and Deluca said he is in the process of interviewing Streetsense for another project.

 
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