The Why

“If you want to touch the past,
Touch a rock.

If you want to touch the present,
Touch a flower.

If you want to touch the future,
Touch a life.”

– Chinese Proverb

What is Social Impact Real Estate

Real Estate with a Public Good Purpose

SOCIAL IMPACT INVESTING AND REAL ESTATE

Although impact investing has grown tremendously over the last decade, it has been relatively slow to find its way into real estate in any significant way. In the last few years this has been changing, with the advent of a number of social impact investment companies and funds that specialize in real estate.
However, one of the most common complaints voiced by fund managers is that there has not been an ample supply of social impact real estate projects developed and available for lending to or investing in.

The inevitable increase in impact investment money being available for social impact real estate (“SIRE”) deals in coming years is one of the many reasons for the creation of JJK Places: it is positioned to take advantage of such capital sources in the future. In addition to producing and consulting on social impact real estate development projects (i.e., the “production side” of real estate development), JJK Places will seek to be positioned as a safe, dependable, and well-respected conduit for investing impact capital in the Denver and Colorado real estate markets (i.e., the “funding side” of real estate development).

(For more information on JJK Places’ role in real estate, please refer to the ABOUT section of this website.)

SOCIAL IMPACT REAL ESTATE (“SIRE”) DEFINED

JJK Places is a social impact real estate company. But what does this mean?

First, one must define what “social impact real estate” is and is not. Based on academic, industry, and business research, it reveals eight primary requisite characteristics, and three other secondary or potential present traits are necessary for a real estate project or investment to be authentic social impact real estate. These include:

  1. It is intentional—that is, the investment has been made intentionally to create social impact
  2. It prioritizes people, community, and the environment as highly as it does economic returns
  3. It creates benefits for an entire community, not just a small sector
  4. It addresses a significant systemic challenge faced by a community or large population group
  5. Its impact is new and long-term
  6. It authentically involves the local community through engagement and project input
  7. Its design and purpose respects the existing physical and social fabric of a neighborhood
  8. It produces not just economic returns for a developer/investor and their project funders, but also delivers long-term value creation for multiple stakeholders (what is appropriate is defined by each)

Often it also has these additional traits (though not always):

  1. It is produced as a collaboration between multiple economic sectors, often including government, nonprofit organization(s)/philanthropy, for-profit business, and the community
  2. Its funding capital stack is complex, diverse, and multi-layered
  3. Due to its intricate logistics, number of stakeholders, and financing structure it necessitates a much longer timeframe to plan, arrange commitments, and implement.

As can be viewed from the above, intentionality, impactful, long-term, addressing a significant social (or environmental) ill, and authentic community engagement are hallmarks of social impact real estate.

The Why

DEFINITION OF SOCIAL IMPACT REAL ESTATE

The definition of social impact real estate (“SIRE”) that JJK Places uses to judge our work and its impact is as follows:

Social impact real estate is a real estate development or investment that prioritizes people, their community, and the environment as highly as it does economic returns; it is a project pursued intentionally to serve a community or large population group by addressing a significant systemic challenge being faced by that community or population group. Such project seeks to produce a new, long-term solution that is measurable, positively affects an entire community not just a small sector, and respects the existing physical and social fabric of its surrounding neighborhood. A successful project delivers long-term value creation for all stakeholders, along with risk-adjusted returns for project investors, lenders, and funders (with the appropriate “value creation” for each stakeholder defined by each stakeholder in different ways).

This is the kind of real estate that JJK Places refers to as “people focused, community-centric” real estate.

From the above definition of SIRE, it therefore follows that a social impact real estate company is defined as follows:
A social impact real estate company is a for-profit real estate development and/or investment company focused entirely or almost entirely on a publicly declared mission to intentionally create socially and environmentally sustainable buildings, spaces, and the built-environment in ways that deliver new, long-term, measurable, positive change to a significant systemic challenge being faced by a community or large population group. Such a company is by definition Triple Bottom-line—prioritizing people, planet, and profit—along with delivering long-term value creation for all stakeholders (as defined by each stakeholder). Additionally, the company takes great efforts to authentically involve local community members in engagement and project input, and pursues a design and purpose which respects the existing physical and social fabric of a project’s surrounding neighborhood.

Integral to this above definition are several required elements that are characteristic of a social impact real estate company:

  • Operates with higher business, social, and environmental standards of responsibility, accountability, and transparency
  • Specific declared public benefit purpose(s)
  • All or nearly all of its company focus and efforts are devoted to social impact real estate projects
  • Intentionality of efforts (i.e., seeking public benefits is one of the primary reasons to pursue a project)
  • Efforts seek to address a widely existing systemic challenge(s) faced by a community or large population group
  • Efforts cause new, long-term positive change or impact
  • The impact affects the entire community
  • The impact is quantifiable and measurable
  • Projects are designed respecting the existing physical and social fabric of a neighborhood
  • Such a company seeks out and involves authentic community engagement and input in projects