Redeveloping Historic Chicago With Architect Prashanth Mahakali, Real Finds Podcast #16 Transcript
Gordon Lamphere: Hi, I’m Gordon Lamphere, and welcome to the Real Finds Podcast, the podcast series where we interview key entrepreneurs, scientists, and activists who are shaping the commercial real estate industry and, as a result, our world. On today’s podcast, we’ll be speaking with Prashanth Mahakali. Prashanth is the founder of PMPC Architects and a partner at RealView Design and Development. On the podcast, we discuss his unique path to becoming a rising star in the Chicago residential development world, the state of residential development in Chicago, and his tips for investors and brokers on getting the most out of their architects. It’s well worth a listen. Hey Prashanth, thank you so much for hopping on the podcast today.
Prashanth Mahakali: Gordon, thank you for having me. It’s a pleasure to be here and share some information.
Gordon Lamphere: Before we start, could you give us a brief background on how you got into architecture and real estate?
Prashanth Mahakali: Happy to. I’m originally from India, and I came to grad school at UIC for architecture. Coincidentally, that was 2001, just a month after 9/11 happened, which put all my grand plans into reverse, because nobody was willing to hire an immigrant architect, and there was no architecture business for skyscrapers especially, which is what I really wanted to do. It changed my career path completely. About twenty years on, I specialize in residential real estate, low-rise and a lot of residential, and some commercial as well.
I’ve always had the entrepreneurial itch, so I was glad to open my own firm back in 2008. Real estate has always been an integral part of my practice, dealing with investors, the City of Chicago, and banks, so I got into it myself. I’ve been a licensed broker since 2010, dabbling in real estate as a hobby at first. Around 2016, I started a development company, and we started doing serious projects on a larger scale. We’re at about a hundred single-family homes in the last seven years or so. I have an active architectural practice and a development side.
Why Architecture
Gordon Lamphere: We’ll get back to development, but why architecture? Every architect I’ve met has a real why.
Prashanth Mahakali: My inspiration was my father. Back in India, he worked for a lot of architects, and architects are revered like gods there, at least when I was there. It’s a totally different mindset. When an architect walks onto a job site, everybody drops everything and pays attention. I was enamored by the role an architect plays in creating a building. I specifically remember one building that was going to be inaugurated the next day. My dad took me to it, and they had a big white light shining on it and it just glowed. That image is etched in my head forever. I thought, what if I could be the creator of something like this? That started the journey, and every step after seemed meant to be. I have an innate ability to connect with people, and I wanted to use that to make a difference in people’s lives through the built environment. I feel like it’s going well so far, but I want to do more. I don’t want to be known just as an architect at the end of my life. I want to have made a difference in the lives of many people.
Gordon Lamphere: I always say developers are among the most underappreciated groups in the world. So many people hate developers, and if they do their job right, they make a huge positive difference in people’s lives. What got you into development? That’s not a path I always hear about from architects.
Prashanth Mahakali: As an architect, I’m always dealing with clients, and those clients happen to be developers. Early on, working for other architects, and later with my own practice, I’d come across these folks putting a deal together, the art of the deal, to use a term that’s often misused. It was so enticing, and I was just one part of their deal. I always wondered what it would be like to be the creator of the entire deal. I’ve always had the notion that if I conquer one aspect of something, I look for what’s more, what else is there to conquer. With architecture, I was able to create buildings, but there was an entirely different side I was missing, and I wanted to be part of it. Now, as a developer, I interface with the community if I need a zoning change, the banks, the city or village where we’re working, the workers building the whole thing, my architectural staff. It’s an all-encompassing role where you get to thrive as the leader of all these groups of people and create something that makes a positive difference in their community. That’s very gratifying.
Design That Unlocks Value
Gordon Lamphere: One of the most underappreciated and underutilized minds on any deal team is the architect, because they have such a diverse perspective on different structures and on how to design buildings people actually want to use, versus just fitting as many seats or racks per square foot. Can you give an example of a time you used spatial design to make a space matter in an improved way?
Prashanth Mahakali: Absolutely. A specific development in Humboldt Park in Chicago. Even though I’m developing spec single-family homes, these are commercial loans, and they’re very serious. You need to get them done, or you pay a lot the longer you hang on to them. Chicago is famous for its standard lot size, 25 feet by 125 feet. This particular lot was a deep lot, about 175 feet, and it had an L shape at the back with a small additional piece, which is very unusual. Even more unusual, it had a matching reverse-L-shaped neighbor. I’d never seen anything like it. The combined frontage was about seventy-five feet. The neighbor was run down, almost a teardown, and they weren’t ready to sell. But as soon as I acquired our lot, I knew there was no way they could sell their land to anyone else, because the back portion of my L surrounded theirs. They didn’t realize that. For me as a developer, it was an aha moment. We told them we were interested in buying and gave them a price. They didn’t agree, and we said, that’s fine, we’re happy to wait it out. Two years later, they put it on the market, nobody would buy it, and I purchased it. I was able to make the two L’s into three regular rectangles and build three homes. A typical investor or non-architect developer would not have thought twice about the possibilities. My knowledge of the zoning code, along with the specific site conditions, made me a more effective developer looking at the highest and best use of the land. I felt pretty proud of figuring that out and being able to execute the plan long term. Now we have three homes going up next to each other with our signature stamp on all of them. That’s one example of many, but it’s the one that stands out right now.
Getting the Most Out of Your Architect
Gordon Lamphere: That’s a great example. What’s your best advice for developers who want to get the most out of their architect? A lot of developers and brokers don’t know the right questions to ask, and they go one of two ways: either they’re overbearing and order architects around and never get any advice, which I think is the worse of the two, or they listen to everything the architect says and don’t follow their own economic path for the project.
Prashanth Mahakali: You’re absolutely right. My challenge has been finding the balance between a financially conscious developer and a cost-conscious architect. It’s rare to see both in one individual, which is what I try to bring to my projects. When talking to an architect, it’s critical to get not just the design feedback, the aesthetic, but to ask about financial knowledge and cost. How do you ensure a design that’s effective from a design standpoint and a cost standpoint? That’s the missing piece of the puzzle, because most architects don’t talk about money. Developers interviewing architects should start with money and cost. Show me examples of a project you started that didn’t run into cost overruns. How do you make sure your designs are efficient from a cost perspective? Then get to design. Most people have it the other way around. Show me a fancy 3D rendering, then figure out what it costs, and lo and behold, it costs a lot. So ask the architect, can you work with us on making this design efficient from both a design and a cost standpoint?
From the architect’s side, my dream developer has always been someone who trusts me 100% as a partner, not just someone doing the drawings. Architects get a bad rap for just getting you a permit. If you’re going to an architect only for a permit, that’s a great disservice to the education that person has gone through. They can provide you a lot more, and you have to demand it. Say, I don’t want you to just handle the permit; what else can we do? That inspires the architect to think, this client is special, let me give them more than drawings. I’ve always been inspired by clients like that, and it led me to become a developer and think that way in every regard. I want to know everything about my workers and everyone I lead. What motivates you? Why are you doing this? Then I take a cue from that, assign it to the project, and say, let’s create something special, so all of us are proud of it.
Trends in Chicago Residential Architecture
Gordon Lamphere: Chicago is a very special city for architecture, with a unique sense of place and a unique moment in architectural history. What are the latest trends you’re seeing in Chicago residential architecture?
Prashanth Mahakali: In residential, there’s a distinct split between custom architecture and the spec homes available for sale. Chicago is a city where, both positively and negatively, you can come to a street and nobody can tell you what not to do unless it’s a landmark street. You can build whatever in the middle of the street. Some architects are more sensitive about fitting in, and some about creating something unique on that lot. It gives you the opportunity to express your best creativity, which I like, but it also means you have to be respectful and responsible with that opportunity. I’ve been on both sides. We’ve done a historic building where the developer was doing an adaptive reuse and we had to make an addition. How do you make an addition that doesn’t stand out or imitate the original but stands on its own? It’s a delicate balance that takes into account the needs of the community. Overall, the city is so cool in letting you express creativity as a developer, because people are open to it. The buyers and the community appreciate it if you do something nice, and it creates a brand you can carry into different neighborhoods.
For example, I’m doing the modern farmhouse. I keep trying to figure out when people will get sick of it, but nobody seems to. They say, give me more. So we’ve built a strategy around similar buildings in different neighborhoods: nice, neat facades with clear, crisp details that stand the test of time. It’s working really well, and no one’s complained there’s too much of it, because they all look good and make good additions to the neighborhood.
Gordon Lamphere: Chicago is full of Midwesterners, so I’m sure modern farmhouse plays well. You mentioned adaptive reuse, and we’re seeing a wide swath of adaptive reuses across the industry. How do you balance maintaining a building’s character with bringing it into the twenty-first century?
Prashanth Mahakali: There are diverse views on whether a building should be torn down or reused, so I come at it from the cost perspective, because it’s the great equalizer. Let’s talk money. If the comparables in the neighborhood support a teardown and full new construction, it should be considered. But it’s not always possible. Take a mixed-use building where you’re trying to change the use of the first-floor retail, because the challenge is usually empty storefronts. If you make it a live-work space, does it work? If it does, you owe it to yourself, as a developer or owner, to explore that option rather than tear down the building and do something else. Base it on what it costs to tear down and build new, and compare that with a different use for the building. Chicago’s building code was recently revamped from the ground up, so it allows a lot of things that weren’t previously allowed. A conversation with an architect, which is usually a complimentary consultation, to discuss various ideas is a very wise first step for a developer or building owner.
Office and Retail Conversions
Gordon Lamphere: We’re seeing a consistent push on the developer side away from some traditional uses in the city, including retail being converted to residential and office being converted to residential. Are you seeing those opportunities?
Prashanth Mahakali: It’s the new thing now. We’ll see a lot of office and retail conversions to residential, because there isn’t enough housing stock in certain neighborhoods, where it absolutely makes sense for vacant storefronts to become residential. In some neighborhoods there’s a strong push against such conversions, because the residents won’t like it, so you’ll know fairly quickly which neighborhoods and streets are ripe for it. I’m very excited by the LaSalle Street conversions the City of Chicago is proposing, turning massive office buildings into residential. I’m curious to see how the dynamic of downtown living, especially on a street like LaSalle, traditionally full of bankers walking down the street, transforms when people live there. How will it impact the city and the idea of downtown?
The case against it is that ground-level residential spaces aren’t optimal, because people are walking right next to your living space on pedestrian streets, and I don’t think the quality of those spaces will be well thought out. Once this becomes a trend, my fear is that someone who hasn’t fully thought about the impact attempts something and gives the entire conversion trend a bad reputation. We need to be careful and make sure the quality of the spaces is considered before embarking on a conversion.
Gordon Lamphere: On quality of spaces, is there a particular kind of space you and the developers you work with are looking at?
Prashanth Mahakali: Because of the city’s narrow, long lots, it’s difficult to get a floor plan that stands out. It’s a rectangular, long, narrow floor plan in most Chicago homes. It’s an architect’s dream to have a double-height space inside a building. Introducing double heights and playing with volume creates unique opportunities to enjoy the space more. My goal is to create as many tall spaces as I can within these developments, new or existing, to give people the idea that architecture isn’t just about living inside a room, but about space and how you navigate it while living in the building. It gets people excited to walk into the space. In architecture school, we’re taught about introducing drama. Frank Lloyd Wright, for example, would bring you through a very small, low-ceilinged entry, and then it transforms into a big, open, tall space. Those are tricks of the trade most architects have but don’t get to use in everyday development. When they talk that language to a developer, there’s more room for it.
One I’d point to is Unity Hall on the South Side, in Bronzeville, near IIT, where we were the architects on an adaptive reuse. It was a three-story church, one really big, tall space, and the developer chose us to figure out how to fit student housing inside it. We added three floors within that one space, the reverse of everything I’ve been talking about, but it created many units within one giant space and saved a landmark building from ruin. I was disappointed to lose the double-height space, but it turned out to be a great project, and the building won an award. It’s gratifying to fill a space with usable spaces, or to carve out a small space and make it dramatic. Those are the exciting features an architect gets to play with.
Gordon Lamphere: You’re an award-winning architect and a successful developer. What advice would you give aspiring architects? One of my best friends recently got into the profession, and it’s a tough road.
Prashanth Mahakali: I wish you’d never asked, because I could go on for another hour. Here’s how I’d summarize it: every architect, whether in a traditional job or their own practice, owes it to themselves to see what it means to be a developer someday. You have the skill sets, the natural abilities, the education, and the experience dealing with clients. You should become your own client at some point in your career, even for just one project. Architects would really enjoy it, but they get stuck on how much things cost and self-defeating thoughts. Definitely consider doing a project as a developer. It changes your mindset completely and makes you a better architect for all your other clients.
The Final Four
Gordon Lamphere: Wonderful advice. We’re getting toward the end, and on every podcast we ask the same four questions, which we call the Final Four. First: ten years from now, what will have changed most about architecture and the real estate investing world, particularly in Chicago?
Prashanth Mahakali: The process of developing real estate is going to get easier, but also more competitive. A lot of the data that’s currently inside architects’ heads will be out in the open. You’ll be able to determine the possibilities of a project faster than you can now, and most likely a technology tool will assist you in doing that.
Gordon Lamphere: Big data is crazy. What specifically in data will revolutionize architecture?
Prashanth Mahakali: I like the idea of compiling large amounts of data and finding actionable intelligence. One example is Chicago Cityscape, a website that pulls all the Chicago big data and tells you what’s happening in which neighborhood, so you pick up trends faster than sifting through the data yourself. Knowing how to slice and dice data will become an essential tool for a lot of people in the coming years, whether you’re an architect, investor, or developer, because data keeps you on top of your game. If you don’t know what to do with it, you’ll end up following other people.
Gordon Lamphere: We’ve had data scientists and proptech folks on the podcast, and it’s data, data, data. It’s the future. Now let’s step back to the past. If you could travel back to when you just got out of school, what two-minute spiel of life advice would you give young Prashanth?
Prashanth Mahakali: I would not change anything. I wish I had a regret, but I’ll give you an example. I’ve always had the entrepreneurial itch, an entrepreneurial solution to any problem I faced. I was out of a job in 2008 when the recession happened. I’ve shared this with a lot of people: I would sit at City Hall and go up to folks who weren’t getting helped and say, hey, I’m an architect, I just heard you talking to this person and it doesn’t look like they helped you. I can help you, and here’s how. They appreciated it. Some people said, that’s crazy, but at the time I did whatever I had to do to make a living, and those moments shape you. Everything I have right now is based on those experiences, and I wouldn’t trade them for anything.
Gordon Lamphere: Being a go-getter and getting firsthand experience chasing deals is priceless, whatever business you’re in. Another way to get priceless knowledge is through books. Do you have a real estate or business book that’s influenced your career?
Prashanth Mahakali: I don’t get to read a lot of books, but I’m an Audible addict. I spend a lot of time in the car, and instead of making excuses about time, I have the Audible app with about ten books I’m always listening to. Right now I’m intrigued by Grant Cardone and The 10X Mentor on Audible. It’s compelling to hear him talk, like he’s talking to you directly. I try not to fall into personality cults, but there are things he shares that are very helpful, both in real estate and in life. I’m enjoying it and curious to see how I’ll apply what I’ve heard.
Gordon Lamphere: Anybody who’s successful has unique tidbits you can apply to your life. The last and most important question, and the whole reason for the podcast: who’s the next person we should have on who’s influencing the real estate world? It doesn’t have to be someone from Chicago.
Prashanth Mahakali: I’m very curious about one guy, Scott McKenna, who has a company called McKenna Capital. They’re doing a lot of big deals across the United States. I’m curious to see how I could become an investor with their company, and it looks like they’ve cracked the code on multifamily and large-scale property investments, syndicated with investors. That’s something I want to do in the future. I don’t know enough about them, to be honest, but I’m inspired and intrigued by their model. I’m happy to share more with you offline.
Gordon Lamphere: That sounds awesome. Prashanth, thank you so much for hopping on the podcast today. One final question: how does somebody who listened today best get in contact with you?
Prashanth Mahakali: If you can figure out how to spell my name, that’s half the battle right there.
Gordon Lamphere: As a Lamphere with the p-h, I know the feeling.
Prashanth Mahakali: Prashanth Mahakali is a mouthful. But if you Google my name, there’s a good chance you’ll land on my architectural website, PMPC Architects, or my development website, RealView Design and Development, at realviewdd.com. I’m easily reachable. I love helping people, so I look forward to hearing from your listeners and being of any help I can in their development journey.
Gordon Lamphere: Thank you for hopping on today, and we’ll have to have you on again in the future.
Prashanth Mahakali: Perfect. Thank you for having me, Gordon. I really appreciate it, and I’m excited for your venture and the time you spend creating these episodes. They’re very helpful.
Gordon Lamphere: Thanks again to Prashanth. We appreciate his insights. If you enjoyed the podcast, please give us a like, a five-star rating, or a review. Your comments, interactions, and subscriptions truly matter and help us continue to provide quality guests. You can follow us on YouTube, Spotify, or wherever you get your podcasts. I’m Gordon Lamphere with the Real Finds Podcast. Thank you for listening.
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