Can real estate development organization SoLa Impact's newly launched Black Impact Fund, continue to deliver solid financial returns for its investors while driving social change beyond its "home base" of South Los Angeles?
Can real estate development organization SoLa Impact's newly launched Black Impact Fund, continue to deliver solid financial returns for its investors while driving social change beyond its "home base" of South Los Angeles?
PAUL MILSTEIN CENTER FOR REAL ESTATE From the time of its founding in 2014, the real estate development organization SoLa Impact has focused on renovating rundown properties to create affordable residential units for underserved people in South Los Angeles—generating healthy financial returns for its investors and creating positive social change in the neighborhoods it served. In 2019 it expanded beyond residential projects into commercial real estate with the SoLa Impact Opportunity Zone fund. In December 2020, SoLa Impact announced the launch of a $1 billion investment fund focused on the development of Black and Latinx neighborhoods. Named the Black Impact Fund, it would be the largest investment vehicle of its kind. If the Black Impact Fund was successful, it would increase the size of the organization more than five-fold and expand its reach beyond South Los Angeles. This case asks students to consider whether SoLa Impact can successfully scale up beyond South Los Angles—and whether its high-touch, high engagement investment model would require adjustments.
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