ImpactAlpha, June 28 — Chicago Trend is looking to raise $50 million to purchase and renovate blighted neighborhood shopping centers in majority-Black neighborhoods. It will invest alongside approximately 1,000 local residents through community investment vehicles, or CIVs. CIVs allow residents to pool together funds to purchase and own neighborhood real estate assets.
The Chicago-based commercial real estate fund will co-invest on equal terms with the local residents of underserved communities in Chicago, Baltimore, Minneapolis, St. Paul and other cities in the US to purchase up to 20 shopping centers.
Investors in the fund’s first close include MacArthur, McKnight, Pritzker Traubert, Kresge and Surdna foundations. Chicago TREND’s strategy can revitalize commercial corridors while “meeting the needs of local residents so they can keep wealth in their communities,” MacArthur’s Allison Clark told ImpactAlpha.
Lyneir Richardson launched Chicago TREND in 2016 with grant funding from McArthur and The Chicago Community Trust.
Inclusive real estate finance
The TREND Real Estate Fund will invest up to $5 million of equity to acquire mid-sized shopping centers that cost between $2-25 million.
“Really, the fund allows us to invest up to 95% of the equity that’s required,” said Richardson. “But for a limited period of time, say 60-90 days, we’ll offer between 5% to 49% of the equity to the small, local individual investors.”
Following renovations, shopping centers in the fund’s portfolio 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. In the firm’s five deals so far, nearly 350 local residents have invested an average of $2,100 and $2,300 each to purchase the properties. “That’s the grandmothers, millennials, church leaders and others in the community,” said Richardson.
In Baltimore earlier this year, Chicago TREND secured $454,000 from 200 local residents to acquire and redevelop Edmondson Village, a 300,000-square-foot shopping center, for $17 million. The city of Baltimore approved a $7.5 million grant to Chicago TREND for the project.
The community shopping center is expected to generate over 1,000 construction and retail jobs, mainly for local Black Baltimore residents.