Innovative Neighborhood Investment Program Helps Low-Income Residents Build Long-Term Wealth

November.03.2017

Orrick’s impact finance team helped Mercy Corps Northwest launch its first Community Investment Trust (CIT), an innovative investment vehicle designed to provide local residents with an exclusive, low-dollar investment opportunity in a neighborhood commercial property. This pioneering pilot program is the first of its kind in the United States and has the potential to transform neighborhoods and the lives of community members who invest in them.
 
Through this inclusive program, 300 to 500 Portland and Gresham residents within four zip codes will have the opportunity to invest in a commercial property in their neighborhood through the CIT. The first investment property is Plaza 122, a 29,000-square-foot mid-century commercial retail mall in outer Southeast Portland with 26 business and nonprofit tenants, reflecting the diversity of the neighborhood.

Neighborhood residents can purchase CIT shares for as little as $10 and up to $100 per month. “Today is the day residents of east Multnomah County can become real estate investors. They can own a piece of their neighborhood – a share of Plaza 122 thanks to the Community Investment Trust,” said John Haines, executive director of Mercy Corps Northwest.

More than 60 percent of residents surrounding Plaza 122 are renters, and many live in a condition of asset poverty. This population generally has little extra money to save or invest, but the hope is that the collective structure of the CIT, together with participation in a financial action course sponsored by Mercy Corps Northwest, which is required for all investors, will help these residents become owners of their community. In addition, the CIT shares are fully liquid for neighborhood investors through a letter of credit issued by a local community bank – so while investors are incentivized to invest over the long-term, they also have the ability to access their investment in the event of a financial crisis.

“We are extremely proud to be a part of the CIT and to be able to utilize our transactional and other skills to create opportunities and build better communities,” said Orrick's Mike Schrader. “This unique transaction is a testament to the breadth of Orrick’s collective expertise and our commitment to positively impact those less fortunate than us.”

In addition to Mike, the Orrick team includes Doug Goe, Kristin Cornuelle, Steve White, Christine Reynolds, Christine Rankin, Steve Wagner and others.