Development firm Peebles Corp. is launching a $500 million investment fund for minority and women developers in markets that include New York, Los Angeles and South Florida, The Real Deal has learned.
The Peebles Corp. founder Don Peebles announced the company’s new fund during TRD’s annual residential real estate showcase on Friday, at the London Hotel in West Hollywood, where he moderated a panel on diversity in the industry.
For minorities and female developers, “access to capital has been the biggest challenge,” said Peebles, who has been an outspoken advocate for diversity in the industry. “I looked at how to address that for a number of years. No one in the country is doing this on a national level.”
In addition to supplying capital, Peebles said his company will look at ways to support the emerging developers. Through co-developing or partnerships, he hopes the fund will “help mitigate risk and help them grow quicker.”
To ensure “boots on the ground” support, Peebles said the fund will invest in projects based in cities where Peebles’ firm already operates: South Florida, New York City, Los Angeles, Boston, Washington D.C., Philadelphia, and Charlotte.
The fund will focus on urban infill projects that range between $10 to $70 million. There will be a variety of commercial and multifamily projects, with an emphasis on projects that offer affordable housing.
“The idea is to create this business model that shows that investing in emerging developers and investing in diversity will result in higher returns with less risk,” Peebles added.
Peebles said he is having discussions with global banks and other financial institutions to invest in the fund, though he declined to identify them. He anticipates the fund will consist of a small group of investors.
The firm is targeting 60 deals in the fund, Peebles said. He anticipates there will be similar funds in the future.
“It’s a very positive thing to have the developments that are taking place in communities of color, to have the projects be developed by people of color,” Peebles said. “We see this as a win-win and an untapped market.”