Key Takeaways
- • The Chicago TREND Real Estate Fund has secured a first close of $10 million from foundations including MacArthur, McKnight, Pritzker Traubert, Kresge and Surdna, and is targeting $50 million in total to buy and renovate blighted shopping centers in majority-Black neighborhoods.
- • The fund plans to co-invest on equal terms with approximately 1,000 local residents through community investment vehicles (CIVs), with the goal of acquiring up to 20 shopping centers across Chicago, Baltimore, Minneapolis, St. Paul and other US cities.
- • The fund will commit up to $5 million of equity per mid-sized property costing $2–25 million, and will offer 5% to 49% of the required equity to small local investors for a limited window of roughly 60–90 days.
- • To date, Chicago TREND has acquired three shopping centers in Chicago and two in Baltimore, with nearly 350 local residents investing an average of $2,100 to $2,300 each.
- • Shopping centers will prioritize local businesses as tenants and offer them discounted rents after renovation, according to ImpactAlpha.
Summary
Chicago TREND, a Chicago-based commercial real estate fund, has closed its first round of funding at $10 million toward a $50 million target, according to ImpactAlpha. The fund aims to purchase and renovate blighted neighborhood shopping centers in majority-Black neighborhoods, co-investing alongside roughly 1,000 local residents through community investment vehicles (CIVs), which allow residents to pool funds to buy and own neighborhood real estate. The fund is targeting up to 20 shopping centers in Chicago, Baltimore, Minneapolis, St. Paul and other US cities.
The first-close investors include the MacArthur, McKnight, Pritzker Traubert, Kresge and Surdna foundations. MacArthur's Allison Clark told ImpactAlpha that the strategy can revitalize commercial corridors while "meeting the needs of local residents so they can keep wealth in their communities." Lyneir Richardson launched Chicago TREND in 2016 with grant funding from MacArthur and The Chicago Community Trust.
The structure is designed to let the fund carry most of the capital burden. The TREND Real Estate Fund will invest up to $5 million of equity to acquire mid-sized shopping centers costing between $2 million and $25 million. Richardson said the fund can cover up to 95% of required equity, while for a limited period of about 60 to 90 days, local individual investors are offered between 5% and 49% of the equity. After renovations, properties will prioritize local businesses as tenants and offer them discounted rents.
To date, Chicago TREND has acquired three shopping centers in Chicago and two in Baltimore. Across these five deals, nearly 350 local residents have invested an average of $2,100 to $2,300 each.
The first-close investors include the MacArthur, McKnight, Pritzker Traubert, Kresge and Surdna foundations. MacArthur's Allison Clark told ImpactAlpha that the strategy can revitalize commercial corridors while "meeting the needs of local residents so they can keep wealth in their communities." Lyneir Richardson launched Chicago TREND in 2016 with grant funding from MacArthur and The Chicago Community Trust.
The structure is designed to let the fund carry most of the capital burden. The TREND Real Estate Fund will invest up to $5 million of equity to acquire mid-sized shopping centers costing between $2 million and $25 million. Richardson said the fund can cover up to 95% of required equity, while for a limited period of about 60 to 90 days, local individual investors are offered between 5% and 49% of the equity. After renovations, properties will prioritize local businesses as tenants and offer them discounted rents.
To date, Chicago TREND has acquired three shopping centers in Chicago and two in Baltimore. Across these five deals, nearly 350 local residents have invested an average of $2,100 to $2,300 each.
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