Equitable wealth building urgently requires an expansion of availability and access to a broader range of reimagined investment vehicles.
One promising approach to democratize ownership is inclusively owned commercial real estate (CRE), which has emerged as a tool to help families build wealth and facilitate local ownership of community assets. These efforts are explored in the January 2025 Aspen Institute Financial Security Program (Aspen FSP) primer Investing in Inclusively Owned Commercial Real Estate. Aspen FSP has also released case studies of the models implemented by participants in its Wealth Innovation Cohort, including the Chicago TREND Corporation, the Community Investment Trust, LocalCode, LocalCode Kansas City and Partners in Equity.
Philanthropy is critical for making many inclusively owned CRE development and investment opportunities a reality. Many funders have the resources to offer an array of tools, such as grants, loans, and loan guarantees, that can support the development, growth, and replication of inclusively owned CRE projects. In response, AFN offers this companion paper to highlight why philanthropy should consider facilitating inclusively owned CRE projects and to explore the ways in which philanthropic funders can engage.
WHY EXPAND ACCESS TO COMMERCIAL REAL ESTATE INVESTMENT?
Investing in CRE can be a strong tool for building wealth, but high initial costs have historically limited access to these investment opportunities to primarily some of the wealthiest individuals.
Inclusively owned CRE is unique because it not only builds collective economic growth, but it can also potentially enable individuals and households on a micro level to accrue material financial gains over time.
MAKING THE CASE FOR PHILANTHROPIC INVESTMENT IN INCLUSIVELY OWNED CRE
Investing in inclusively owned CRE drives multiple outcomes aligned with foundation priorities and missions, such as addressing the racial wealth gap, democratizing ownership, and prioritizing local control of business assets. It can mitigate some impacts of the racial and gender wealth gaps in the CRE market by promoting ownership among consumers who have been historically excluded from equal access to such markets.
INVESTMENT STRATEGIES
Philanthropy has numerous options for supporting inclusively owned CRE projects, most of which require more than one type of capital to launch, expand, and withstand shocks.
Private Grants
Recoverable Grants
Program Related Investments (PRIs) or Mission-Related Investments (MRIs)
Loan Guarantees
Recommendations for Philanthropy
Through its various financial, human, and other assets, philanthropy is well positioned to support the development of inclusively owned CRE models and the growth and replication of such projects.
Conclusion
Inclusively owned CRE projects and initiatives can offer various benefits; namely, to spread ownership of potentially valuable asset holdings more diffusely and encourage residents to have a material financial stake (alongside their existing engagement) in commercial development of their communities.
Funders interested in promoting financial health and economic mobility, closing the racial wealth gap, and spurring additional quality neighborhood and retail growth opportunities can play a role in supporting such efforts to achieve these goals, as well as foundation-specific goals aligned with these efforts. Philanthropists’ toolkits have a variety of approaches that can have a clear impact and expand access to inclusively owned CRE, whether that is providing capital in its various applicable forms, furnishing much needed expertise, or using convening power.