Group brings co-op model to downtown investment to build change

The new Homestead Investment Cooperative allows members to collectively buy into a piece of downtown real estate and participate in a community doing so, its co-founder said.

"So often, investment in commercial buildings and downtowns is saved for the higher net worth individuals and the (real estate investment trusts)," Tegan Martin-Drysdale, a co-creator of the organization, told Taproot. "It can be difficult for an everyday citizen to have an opportunity to invest in their downtown core."

That's why Martin-Drysdale is launching the new investment co-op with co-founder and former Edmonton mayor Don Iveson. (Chris Henderson, Iveson's former campaign manager, also helped establish the co-op but "had to step away," Martin-Drysdale said.)

The first building the co-op will focus on is the Alberta Block, a 40,000-square-foot building on Jasper Avenue that dates back to 1909. Martin-Drysdale already owns a stake in the building through her RedBrick Group of Companies. (A representative for Martin-Drysdale did not provide details on who her co-owners are.) It's also where she operates the Homestead Coworking business that she owns.

A conventional investment in the building would cost hundreds of thousands of dollars, she said. But rather than that huge figure, investors in the new co-op can buy a stake in the building with a minimum outlay of $10,000. Phase 1 of the launch is currently open to directors, officers, employees, founders, control persons of the business, their close personal friends and business associates, family members, existing security holders, or accredited investors. Phase 2, open to anyone, will be launching in the coming weeks. In June, Martin-Drysdale said the co-op had raised approximately $250,000 of investment in its first few months from the circles of the founders and board members. Now, she's ready to spread the word publicly.

Martin-Drysdale uses "Homestead" in the names for both the co-work business and the co-op because she feels it's emblematic of a certain mindset. "It's that pioneering spirit — that's kind of where the Homestead brand came from, out of creating something where it didn't exist before."

Martin-Drysdale is one of several current owners of the Alberta Block who will be essentially bought out by the co-op. Her stake will be converted into co-op shares and her unnamed co-owners will exit ownership, a representative said. The representative for Martin-Drysdale did not say how much the building will sell for.

Once the co-op purchases the building, its future is up to the co-op members who will vote on major decisions at annual meetings. The investment requires a five-year commitment. "We're setting a minimum expectation of five years (before selling any acquired property)," Martin-Drysdale said. "The best way to make money with real estate is usually a long-term hold, but it will be up to the membership to decide when they want to exit, when they want to hold, and when they want to acquire more properties."

Martin-Drysdale estimates investors could see a 6% annual return, thanks to strong rental revenue at Alberta Block. That's based partly on the attractiveness of the building to tenants. RedBrick oversaw a complete retrofit of the former home of CKUA after its sale in 2014.

"Our vacancy rate is 5%," she said. "We've historically had a lower vacancy than downtown Edmonton because it's a good location, it's a character building, it's got low operational costs, and it just attracts a certain creative, innovative type of company to be here. And people want to be here. The energy is palpable on our block."

Some of that energy comes from dining hotspot Fu's Repair Shop and its sister business Double Dragon. Kyla Kazeil, a partner in those businesses (plus The Common and Dolly's Cocktail Bar) is a board member of the cooperative. In addition to Kazeil, Martin-Drysdale, and Iveson, other board members are Jacquelyn Cardinal of Naheyawin, Adam Rozenhart of Adverb Communications, Ahmed Abdelrahman of solace, and Heather Kerschbaumer of Golden Acre Seeds.

Many of these people were part of Edmonton's NextGen during its tenure that ended in 2023. (Homestead Coworking just hosted a NextGen reunion event at Fu's.) NexGen worked for 18 years to engage young Edmontonians to work together to improve the city and may be best known as the host of PechaKucha nights in the city.

"When I was looking at assembling my board and growing this community, I wanted the doers and the builders and the makers, and the people that go out and make the community that they want," Martin-Drysdale said. "Those are the people that we want to build a community of because that's what I think Albertans are really good at: building their own destiny. When there's a problem to be fixed or a gap in something, whether it's a service or a product or type of building, they go and build it."

Similar to NextGen, Martin-Drysdale envisions the co-op as a meeting of the minds that will work together to overcome challenges.

"You're no longer just a handful of private investors that have a limited network to draw on for new tenancies or to solve a vacancy issue," she said. "Now, you've got hundreds of invested community members that you call upon to say, 'Okay, we have a vacancy coming up. Does anyone know anyone that needs office space in six months or 12 months? Or is there anyone that is in this industry that can come solve this problem?'"

The Homestead co-op will focus on properties in downtown Edmonton and eventually in other parts of Alberta. Each member has voting power on the co-op's decisions regardless of investment size. There will be a distinct brand across the eventual portfolio.

"We plan to create a set of criteria for what those buildings will look and feel like," Martin-Drysdale said. "When you go between our different communities and our different buildings, you'll get a certain quality and feel and vibe that's consistent across Alberta."

Another recent development is Homestead Coworking's expanded virtual offerings. The lowest membership tier ($40 per month) includes one day of in-person coworking and access to programs, sessions, and workshops both online and in person. Martin-Drysdale said she's now targeting rural Albertan coworking members who can "connect with other like-minded entrepreneurs across the province."

Martin-Drysdale calls herself an "eternal optimist" about Alberta and its many downtown areas, and she thinks the co-op model can empower investors to help shape the future of these places.

"I think Alberta is resilient," she said. "What I like about the cooperative model is that it builds a level of resiliency around you because you have a whole community to draw from."

Clarification: This story has been changed to clarify who can invest in the cooperative and when.