Philadelphia company seeks to raise $1B to invest in creative office space

Resource America Inc. has filed a shelf registration to form a real estate investment trust that will focus on investing in creative office spaces.

The Philadelphia real estate company, which has its offices at 1845 Walnut St., wants to raise $1.1 billion for a company it will call Resource Real Estate Innovation Office REIT Inc. It priced the common stock at $10 a share.

In documents filed with the Securities and Exchange Commission, the company outlined why it has decided to go beyond investing in properties that house traditional office spaces and seek to financially gain from emerging trends in commercial real estate and the way people increasingly work these days.

"We believe that the nature of work in the United States is changing – including who is working, how they are working and where they are working," the company said. "Technology – and the people and companies who create it – is the driving force behind this change. A 'creative class' of young and educated workers has emerged and is growing. In order to attract these creative workers, companies are seeking office environments that are open, collaborative, flexible, inviting, authentic and modern."

There are several real estate companies increasingly focused on providing this type of space in buildings that they already own. There are also companies, such as Benjamin's Desk, that lease space in buildings and outfit them as co-working spaces. People can rent the space on a flexible basis. Costs vary depending on whether someone needs a temporary desk or something more permanent.

There are incubators and co-sharing work spaces throughout Philadelphia. Some cater to artists, others to those in tech and other fields.

The new REIT will use the funds it raises to invest in office buildings throughout the country that are designed as creative work spaces. It will also seek to improve those spaces when necessary.

"We may renovate and upgrade the properties we acquire in order to better service companies engaged in innovation," the company said. "To a lesser extent, we will also seek to originate and purchase commercial real estate debt secured by office buildings having the same characteristics."

Resource America (NASDAQ:REXI) is involved in other real estate entities. It formed Resource Real Estate Opportunity REIT Inc. and Resource Opporunity REIT II, which focus on multifamily investments.

Source: Philadelphia Business Journal