Posted Dec 11, 2012, 8:30 PM
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Date: Monday, December 10, 2012, 3:52pm PST - Last Modified: Tuesday, December 11, 2012, 9:18am PST
Group working to connect investors to Portland neighborhood infill projects
By Christina Williams
Sustainable Business Oregon editor
http://www.sustainablebusinessoregon.com...na=e_ptl_real&s=newsletter&ed=2012-12-11
Quote:
A group under the working name Guerilla Development Capital is hosting a meeting this week to stoke interest in a new kind of investment platform that would connect individuals who have money to invest in real estate with community-minded developers looking to build innovative infill projects.
Tom Osdoba, a consultant who was recently named vice president of green initiatives with affordable housing company Columbia, Md.-based Enterprise Community Partners, is leading the effort.
"We've been working on this for over a year," Osdoba said.
Guerilla has half-dozen neighborhood-oriented developers lined up who are looking to raise money for community-scale projects that mix housing with retail and other uses. Now the group aims to find investors to connect with those developers.
"There should be a platform for investors interested in community development," said Osdoba, who is the former director of the Center for Sustainable Business Practices at the Lundquist College of Business at the University of Oregon.
The idea for the effort began when MBA students Osdoba was working with at UO collaborated on a project with Mercy Corps NW which became a neighborhood real estate investment trust focused on the Lents neighborhood and launched earlier this year.
The idea crystallized further when Osdoba heard the story of the Eco Flats project, a bike-friendly, mixed-use apartment building on North Williams.
The developers behind that project, Jean-Pierre Veillet and Doug Shapiro, told Osdoba, "It took us two years to get our financing in place. It took us 30 days to lease the building."
Osdoba said that other similarly scaled projects, which are often deemed to risky for more traditional financing, stay on the drawing board due to a lack of cash. He argues that these projects are important for sustainable city development and are positive additions to their neighborhoods. He cites Kevin Cavenaugh's Ocean building, which made use of an old tire center to create a space for bigger-than-a-food-cart but smaller-than-a-restaurant businesses.
"To do more projects faster, they need to have cash," Osdoba said. "As the market has heated up, we've seen several possible projects that haven't gone forward."
Guerilla Development would act as a funnel gathering eager investors and matching them with neighborhood projects. A similar effort in Washington, D.C., is underway but pursuing even smaller individual investors.
Unlike that effort and unlike the Lents REIT, Guerilla is seeking mid-sized investors with money suited to the slower returns of buy-and-hold real estate investing.
Osdoba said Guerilla intends to start out by finding investors for some initial projects — ideally two in 2013 — before getting formal about its structure. Ultimately he sees the company holding a small percentage stake in each development in its portfolio rather than taking any kind of transaction fee. The group would work with an investment committee and a project review committee to vet each development.
And there's no shortage of demand for investors among the developers he's working with.
"There are projects in play," he said. "We could do one tomorrow."
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