Nonprofit To Crowdfund Commercial Property To Investors In 4 ZIP Codes For $10 Per Share

A nonprofit group called Catalyst Miami runs a cooperative for local residents to invest in commercial real estate. Working class residents can buy stocks for as little as $ 10.

Executives say it’s a replicable model that could eventually span all of Miami-Dade County.

Catalyst Miami runs a commercial real estate cooperative in North Miami.

Catalyst Miami Vice President of Community Economic Development Ahmed Mori said in an announcement Friday that the cooperative is part of a strategy to create economic prosperity, build prosperity between generations, and promote racial justice.

He emailed Bisnow that Catalyst Miami will raise funds for the purchase of a property through a mix of grants, investment capital and / or debt financing and will set up a separate legal entity to own it. A steering committee will select a property for sale near one of two planned North Miami train stations for the Brightline private train.

Community members 18 years of age and older who live in one of four zip codes – 33161, 33167, 33168, or 33181 – are allowed to invest after passing an investor education course.

“Community investors will regularly buy shares on a monthly basis,” wrote Mori. “We assume stocks are initially valued at $ 10. Community investors have the option to buy 1 to 10 shares per month ($ 10-100), and we estimate a monthly average of 50 US dollars per month based on household income in the zip codes above relative to the cost of living estimates for the city of North Miami. “

Catalyst Miami estimates 75 community investors a year to hit 350 after five years. Mori said by year 10 community investors will own 80% of the building.

Catalyst will keep 20% of the property to later sell to either community investors or another investor to provide seed capital for a second investment cooperative.

“We are also looking into other ways to hedge against downside risks, such as letters of credit,” Mori wrote.

Community investors are protected from losses for the life of their investment, he said.

“In addition to the insurance of the property, we also hire a voluntary legal advisor in the event that a partner, contractual or tort liability arises as part of the project,” wrote Mori. “When a prime tenant moves out, we offer the position to the hundreds of North Miami companies we work with through our technical support and general outreach program. We can also work with the North Miami Community Redevelopment Agency (CRA) to help tenants as they also have strong relationships with small businesses in the community. “

JPMorgan Chase has provided a $ 1 million grant for the project, Friday’s announcement said.