The four NBA All-Stars are helping fund a new real estate project at Harvard University, joining more than 150 black and Hispanic professionals who have supported the nearly $ 1 billion project.
Kyle Lowry of the Toronto Raptors, Andre Iguodala of Miami Heat, Jrue Holiday of Milwaukee Bucks, and Andre Drummond of the Los Angeles Lakers are part of a $ 30 million investment group to develop Boston.
This group also includes black and Hispanic lawyers, doctors, technicians and real estate professionals.
After developer Tishman Speyer submitted a proposal to build the project, Harvard asked the New York firm if it would agree to sell 5% of the project to blacks and Hispanics. Tishman agreed, CEO Rob Speyer said.
The first phase of the new development, which currently requires city and state approval, will cover approximately 900,000 square feet and include laboratory facilities, offices, shops, apartments and a hotel. Tishman Speyer is building the project on land he will lease from Harvard University’s Allston Land Company for 95 years.
“There is a huge inequality in wealth creation in communities of color compared to white communities.”
According to Penny Pritzker, a former US secretary of commerce and board member of the Harvard Allston Land Company, Harvard wanted the widest possible range of people to benefit from the development.
“There is a huge inequality in wealth creation in communities of color compared to white communities,” she said. “So why is this so? Well, maybe this is access to good deals. “
Black and Hispanic investors are accredited investors, which means they have over $ 200,000 in annual income or over $ 1 million in net worth, excluding their primary residence.
While developers can raise funds from low-income investors through a public offering, this is often associated with additional reporting requirements, and Tishman Speyer chose not to follow this path.
“The public offering is approximately 5% inconsistent with the rest of the project, which was structured as a private offering, which is the standard for large-scale development projects,” said Michael Benner, general counsel for Tishman Speyer.
James H. Simmons III, CEO of real estate company Asland Capital Partners and investor in the project, said that wealthy blacks are not usually invited to invest in the same number of private real estate transactions as whites of similar income. …
“There is a reason this is defined as ‘friends and family,’” he said, referring to the usual practice of developers collecting money from people they know.
It is very rare for private organizations to set quotas on race-based commercial real estate investments, and Mr. Simmons said he hoped the Harvard deal, if successful, would become a role model for others.
Harvard established a land company in 2018 to oversee the development of a 36-acre site near the university’s business school in the Allston area. The university plans to attract, among other things, research-oriented companies and startups. The project will also include green spaces and a convention center. Harvard selected Tishman Speyer to develop the first phase, covering about 14 acres, in 2019.
Mr Speyer said he built his new network of black and Hispanic investors through intermediaries such as Mr Simmons and Rudy Cline-Thomas, founder of investment firm Mastry Inc., who brought in NBA players and four National Football League players.
Mr Lowry and his peers are not the first NBA stars to invest in major real estate projects. Erwin “Magic” Johnson, for example, has invested in a number of real estate properties through the Canyon-Johnson Urban Fund, and retired forward Luol Deng has amassed a sizable portfolio of commercial real estate.
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