Trends Watch: Diverse Real Estate Developers and Operators
- Feb 24, 2022
EisnerAmper’s Trends Watch is a weekly entry to our Alternative Investments Intelligence blog, featuring the views and insights of executives from alternative investment firms. If you’re interested in being featured, please contact Elana Margulies-Snyderman.
This week, Elana talks with Yuen Yung, CEO, Casoro Onyx Impact Fund and President, Casoro Group Education Foundation.
What is your outlook for minority and female-owned real estate developers and operators?
The outlook is exceptional. According to a McKinsey report, diversified firms are 35% more likely to have superior financial performance than undiversified firms. However, while the outlook is great, getting there demands effort and attention. The statistics tell it all: Fewer than 15% of commercial real estate (CRE) professionals are women; under 5% are black; 3% of senior executives are Latino; and 2% of senior executives are Asian. The number of African American senior-level CRE professionals was 3% in 2010; it has barely budged from there.
We believe the answer, and the key to superior returns as well, is to support the top minority RE businesses among the 50% who say they struggle to find capital and the 34% who say they are unable to grow their business or expand their operations due to lack of capital.
Where do you see the greatest opportunities and why?
There is tremendous opportunity in developing and providing multi-family housing, and also mixed use real estate, particularly in growth areas that serve knowledge workers. Working with female- and minority-owned developers and operators only enhances things. It’s a classic ‘doing well by doing good.’ Track records and experience of firms in this space, combined with the local insight, relationships, and talents of people long-denied equivalent access to capital markets, makes for a potent mix. We also give back by sharing a substantial portion of our general partner (GP) returns with our foundation that supports real estate education for students in underserved communities. Through funding post-secondary school classes in real estate, we not only provide a training resource but also create a forum where valuable personal connections can be made. Supporting this type of investing raises the game for everyone while closing gaps in opportunity and prosperity. The result is a healthier overall real estate industry.
What are the greatest challenges you face and why?
That’s a simple one: overcoming existing impressions of impact investing. We do not believe in sacrificing returns for doing good. To the contrary, we believe that in our industry an impact approach increases economic returns to both investors and to society. It’s one of the reasons we don’t understand greenwashing, i.e., using ESG/impact investing more as a marketing strategy than an actual fund strategy. There’s no need for that! The other challenge worth mentioning is reporting. We want to develop a new reporting framework that can accurately track the social progress being made by our fund strategy and our foundation. We believe such transparency will encourage others to follow our lead.
What keeps you up at night?
Two things: raising the funds fast enough to allocate to the opportunities we have in our pipeline; and making sure we leave no stone unturned. There is a lot of talent out there deserving of our attention.
The views and opinions expressed above are of the interviewee only, and do not/are not intended to reflect the views of EisnerAmper.
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Elana Margulies-Snyderman is an investment industry reporter and writer who develops articles, opinion pieces and original research designed to help illuminate the most challenging issues confronting fund managers and executives.
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