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“The business of architecture is broken and people are distraught,” says M-Rad CEO Matthew Rosenberg

Matthew Rosenberg, CEO of M-Rad, shares his vision for the future of being an architect as a developer.

July 2019

Matthew Rosenberg Architect and Developer

Matthew Rosenberg

Founder & Design Principal, M-Rad

Matthew Rosenberg was born and raised in Saskatoon, Canada and went on to study and work across 24 cities and 14 countries, studying Environmental Design and Architecture through various programs.

In 2012 he launched M-Rad in Los Angeles and started implementing his vision of reconceptualizing the industry of Architecture. Matthew is currently the acting design principal and owner of M-Rad and resides in Los Angeles, California where he celebrates the fact that he can climb mountains, run on a beach, and explore the thriving urban culture in a single day.

Can you tell us a little about yourself?

I'll go back a little bit to when I went to McGill University in Montreal for architecture and lasted all of a year. I left and studied Fine Arts, I then took a year off and traveled the world. I never really knew I was going to do that, but it's a pretty amazing experience to let yourself go and figure it out along the way.

I then went to Dalhousie University’s Bachelor of Environmental Design and even studied at the Louvre in Paris for a while and before moving from Paris to LA to do my thesis at Sci-Arc.

I exited that place at the heat of the recession, which was a terrible time, and ended up going to Beijing to work for MAD. That was pretty amazing because I got to work on some incredible projects from day one. I eventually made my way back to Los Angeles and started M-Rad about 6 years ago.

What can you tell us about M-Rad?

First and foremost I don't think that good design can come from a stressed business or a business that is struggling to pay their people. The business of architecture is broken and people are distraught. They work many hours, weekends, 7 days a week, and are not getting paid as much as a doctor, lawyer, or some other professions. In my opinion, it doesn’t make a lot of sense.

Compare architecture to other service professionals, especially lawyers, whose billables are wildly higher but whose liability is far less than an architect. We're not able to capitalize on what we're doing and I think that’s a massive problem. I think we can learn a lot from tech where there is equity in the company and in the project you're working on; the better you perform, the more you get paid. I think the solution is to eventually expand the scope of services to gain back control of the process and retain more equity in what we’re doing.

Can you unpack what you mean by equity?

We should understand the whole real estate process. It is well known that architects do a bunch of pre-development work for real estate developers. We should be asking ourselves, what value are these developers bringing? They are able to raise equity and debt but why can't we do that too?

So for example, you could take equity for your work in a multi-family development?

Yea! We have equity in ten of our projects right now. The biggest risk comes in the length of time it takes for equity to pay out in dividends. Those payouts come throughout a much longer time period and over the length of the project. So yeah, it's risky.

We're feeling the pressure now since we've invested in a lot of projects. We’ve invested in them through both cash and services. Obviously, we need cash flow too and so there is a fine balance of extending into quicker services like: branding, marketing, furniture design, and other revenue verticals.

For now, it is working and we are progressing. My hope, ultimately, is that we can publish everyone’s salary and show that some of these bigger billion-dollar firms aren't paying their people enough money and we can prove there's a new way to operate.

Getting equity in a project must be exciting for the team. How does that work?

We just got M-Rad valued and are starting to give shares to people who have been here longer. Our plan is to allow buy-in, so if you want to contribute part of your salary or benefits into these equity pools you will receive a share in the project you're working on. I would have been super excited about this when I was younger.

It would be amazing to have that piece of ownership. Obviously, getting more ownership will take more money but we will build up to that. Right now, it's a statement and every bit counts.

Do you think this approach to a firm is only possible in Los Angeles?

No, not at all. We have equity in a project in San Francisco, a large partnership in Joshua Tree,  and a project in Italy. If it happens here, it can work everywhere.

We balance the traditional method of billing for architecture and taking equity. It really depends on who the client or partner is. Bigger developers don’t operate this way, so it's hard to have that conversation but when we can have it, we have it.

We want to own and be part of the partnership. This develops a stronger relationship with the developer because they know we have skin in the game and we're not just going to walk away. Every decision is thoughtful and intentional.

What is your goal for M-Rad?

Ultimately, the goal is for us to develop all of our own projects. There will be no developer; we raise the equity and control the architecture, marketing, interior design, and maybe even the products going into it.

That sounds like you have a long journey ahead of you.

I started this over five years ago by myself and now we have 20 people with projects around the world. So I think our speed and agility is helpful right now. We are also more aggressive than most architects I know. We have definitely failed along the way and learned lessons but we have grown from those.

Yes, it’s going to be a long slog but if I wasn’t malleable, in terms of contracts and partnerships, I would still be sitting in my apartment trying to get a few projects out the door. This has allowed us to expand faster and grow globally. I think as long as we keep focused on the vision, it will happen faster than most people think.

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