Investing $1M into Innovative Real Estate Models to Build BIPOC Wealth
Authors: Ana Ramos, Manager of Impact Investments
“The CORE cohort with Common Future not only provided a unique opportunity for networking and collaboration with mission-driven ventures across the United States but also championed a set of best practices for investing in innovative neighborhood redevelopment efforts.”
—Adriana Abizadeh, Executive Director at Kensington Corridor Trust
Building on successful investments to support more equitable small business lending to date, and on the learnings from the cohort of CORE practitioners, we decided to invest in two organizations taking innovative approaches to real estate—one was a member of the cohort and one was not. From engaging the cohort, it was clear that patient, flexible, and investee-centered capital was needed to equitably support these innovative real estate initiatives.
We managed our due diligence process in such a way that extended that focus on being in the right relationship with both KCT and JP.
In practice that meant:
- Focusing on getting to a ‘yes’,
- Taking on responsibility
- Quantifying our partners’ unique expertise and value.
The mentality of focusing on making the investment helped us shore up gaps in due diligence or finances, rather than automatically disqualifying them. We waited to do the site visit after we felt confident in the prospective investment. We took on the responsibility of researching both organizations and we built off of KCT’s inputs with our CORE cohort so as to not duplicate efforts.
Lastly, we sought to quantify their teams and unique experiences in creative and intersectional ways. Ultimately, our goal was to get to know the leaders, learn about the communities that they’re in, and understand the impact these solutions were having in their local communities. We asked permission to visit; co-built the schedule and agenda; shared planning responsibility and asked strategic questions in a simple/consolidated way.
Both KCT and JP are located in neighborhoods that are facing rapid development and gentrification. Without this catalytic funding, they would not be able to preserve affordability in these neighborhoods. Our low-interest, long-term loan of $500,000 to KCT mirrors what the CORE cohort lifted as a need in the field—patient capital with affordable terms. KCT will use funding to purchase local commercial and residential real estate, which will be controlled by local civic and business leaders, renters, and community organizers.
In addition to investing in KCT, we invested $500,000 in patient debt to Jane Place, a community land trust, to seed its fund for acquisition and development of affordable housing for low-income renters in New Orleans. This investment will enable Jane Place to have dedicated funds for acquisition and rehab so that they can move on properties in real time, and would give them the capacity to acquire and rehab up to two properties at a time.
Our investments in these two organizations are aligned with our investment thesis of increasing access to affordable capital for communities historically excluded and extracted from the financial system and of building power, choice, and ownership in and for communities adversely impacted by economic and racial injustice. Both JP and KCT are reclaiming land and properties for their communities, building multi-family units, preserving affordability, and ensuring that the future of these neighborhoods always includes working-class Black and brown neighbors.