By Jacob Lipa PE, CEO, Micropolitan
Former Psomas president Jacob Lipa talks about the decision to create Psomas subsidiary Micropolitan
What does a traditional engineering firm do when faced with the deepest recession since the Great Depression? Despite the lousy economy, the firm has a healthy amount of cash in the bank—but your core markets are anemic. Time to think outside the box.
During this time I was president of Psomas, one of the top-ranked engineering firms in the nation. We decided to take something of a risk and diversify beyond our core services to become a developer of multi-family, transit-oriented urban infill projects.
Fast forward to 2016. Psomas subsidiary Micropolitan, of which I am now CEO, sold its first project 100% leased earlier this year. A luxury boutique apartment, the 45-unit Micropolitan at Urban Lights sits in an ideal location across from the Los Angeles County Museum of Art. This month Micropolitan is pre-leasing its next property, the 34-unit Micropolitan at Larchmont Village. With two more projects in the pipeline, we are actively seeking more urban infill sites to develop. Success has led us to increase our project size from 30 – 80 units to 60 – 150 units.
Diversifying into development was, in fact, a logical fit for Psomas. Los Angeles has the need for housing and Psomas has the knowledge base because of its decades of entitlement and engineering work with developers. Psomas is seeing profits from the sale of projects as well as getting a fee for managing the development. An added bonus—Psomas’ newly gained experience as a developer helps in providing engineering services to its large-scale developer clients. The firm now has an even better feel for the challenges development entails.