 My name is Gretchen Zucker. I work with an organization called Ashoka, which is a network of social entrepreneurs About 4,000 social entrepreneurs that are collectively working with other leaders in society to solve some of our society's most intractable problems And I also work with two wonderful impact investment Organizations one is called imperative and the other is elevate It is a privilege to be here with you today at Socap. We're so grateful We look forward to working together during this session to do some problem-solving and What we believe that we will discover over the course of this conversation is that commercial real estate can be a powerful force for The fight or in the fight for equality when we approach it with two mindsets One is that what we're really doing is we're investing in people That's what investing in communities or investing in properties is all about It's the people who are living there who we are working with to To improve the community and create and help the world be a better place and to We're taking a systems change approach to our investing and we believe that we can do this and still achieve risk-adjusted market returns on our investments So I'd like to introduce our other speakers facilitators and the way we're gonna do this is we're going to do a elevator pitch For each of our facilitators, so I'll start with Camilo Galvis who is the founder and CEO of the imperative fund Thank you Gretchen. Good afternoon everybody Thank you so much for coming So My accent is from Colombia However, I ran a financial company based in New York City Probably because it's pertinent to the event in which we're in today regarding social capital I'm gonna start giving you an idea of what what we do by talking about the different social economic systems that could exist In the world in general However, I think that one thing that We would all have probably in common or most of us will have in common is that whatever system exists You call it however you want to call it social capital capitalism liberalism And all the alternatives at the end of the day most likely all of us would like to have a system that promotes abundance as opposed to scar seats and I believe that humanity especially in the past 10,000 years has done a very good job of generating abundance Although it has happened in pockets and the distribution is slightly skewed So any effort that one can put into trying to level up this distribution of resources I think it's fundamental in promoting the continued evolution of our species But at a more practical level So what we do is we have two business segments in our financial company One business segment specializes in investing in prosperous companies in the United States And then our share of profits we move it to the other business segment which attempts to promote poverty elimination by Generating credits within the marginal communities people who are outside of the financial system Hoping that after a certain amount of time We can actually bring them into the mainstream economic system and besides that we can Assist them in eliminating what we define as material poverty while also generating some value creation in terms of a network for these families And then whatever revenues we get in this segment We move back to the other business segment when the opportunity comes along and we try to basically redistribute this capital in a way that We hope our company is helping level up a little bit this skewed distribution that I just referred to so again Thank you so much for being here and then I assume that once we get into the case studies There's gonna be more details on to how we particularly Operate our credit business segment Thank You Camilo Next I'd like to introduce Joseph Spence who's Founded many things one of which is we are makers He's also partnered with Justice Capital From our head of technology media commercial real estate for Europe Middle East Africa and the Americas Which I think is pretty much everywhere except for Asia At Goldman Sachs, and he's also a business partner to imperatives Hello everyone, how you doing today Come on a little bit more energy. How are we doing today? It's a good session so far All right, we'll start there Listen me clearly everyone that's on this stage today, and you've heard it from Camilo, and I know Camilo is is you know Sometimes doesn't Won't necessarily share all the wonderful and great things and impact that he does so I'm not gonna let him get off The hook I'm gonna do a little bit of that here, and you'll see in the case studies, of course That you look at But we're all here bounded by this idea that we can use real estate and Well living living arrangements for people to help build wealth and get people out of poverty relatively quickly and do it in a way that creates more freedom versus Impoverishment and so you know as as Gretchen mentions a number of ventures of which I have focused on and found that over the years post my time at Goldman and But those the themes that are work on which have purely impact related all did start there, you know the Tech media and telecom was a huge focus of mine. I was also An engineer in the past life. I worked at NASA as well as Real estate and so understanding smart and sustainable cities has been coming incredible passion of mine and all the things that go into it And so when we think about affordable housing and the way in which we all live in communities That's also a very important part and how do we expand that and create more options for for the people whom whom we want to serve So just very quickly on that. I partnered with Camilo in the work In all the housing developments that he is building out in emerging markets to begin to come on top of that and say what else can we do? With the residents that we are having here with whom we are building meaningful wealth for in terms of equity And so we're looking at this and saying listen, you know, this person maybe that had negative network now has 40 or 100 or so Okay inequity that's leverageable What are the wonderful products we can build on top of that not to sap them But to multiply them to take that amount of money and make that 40 400 right over time and so We're coming together with the educational resources and the structure and setting up cooperative ventures Between the groups in order to help make that happen So I'm not going to go any further on that because I really want to hear from you all today About what you think about some of the possibilities are within that realm So I'll stop there on this question is anything else I should be saying is that good That's perfect. Thank you. Just pass the mic Yeah, now we pass Mike to Dimitri Dimitri is the founder and managing partner of Elevate commercial Gretchen, thank you for this opportunity My name is Dimitri Booker. I'm the founder managing partner of Elevate commercial We're a social responsible fully integrated commercial estate firm based in sunny, San Diego Our focus is manufacturer housing. We we look at manufacturer housing and what we bring to the table to be Using business as a force for good You guys may know manufacturer housing as mobile home parks or trailer parks But we look at these as communities and so we want to change the stigma of how people look at these communities and improve our resident lives Keyword is we don't use the word tenant. We use residents So number one we're changing the mindfulness of our residents number two We're changing their mindset make sure they have a growth mindset and number three It's money mechanics. We're teaching our residents the money mechanics So therefore number one they could buy their home number two They can actually get together a former community and buy their communities and work with groups like the rock group And that's our mission Also, one of our key areas the reason why we're here today is we feel that there's areas that we can improve number one There's a lot of great minds in those rooms that we could work with number two There's impact investors and our biggest challenges We have is number one changing the stigma of these communities and making sure that the whole industry as a whole changes Number two, we're looking at how to reduce The cost of capital for our residents are currently they're paying 10% for their loans to buy these homes And we all know that's a high interest rate And we're looking at better opportunities to reduce the cost of capital and being the change the leader in the industry to help Our residents have a cheaper cost of capital so they can improve their financial well-being. Thank you Thank you, Dimitri and last but not least is my very dear friend and longtime collaborator of shadow London you I Think it's on I'm on good Welcome everybody. Thank you for coming to this session. My name is Rosario London also my accent comes from Colombia I didn't know Camilo before we actually started working together Some one day somebody said what you are is a systems pre-noor so I took that on as an identity I like to change systems my background for many years and impact investment and innovation One day I was at a conference in innovation and I learned that they're teaching bacteria how to count and At the same time in that same week I learned that it takes around nine to twelve generations for the lower 10 percent of People living in poverty to actually get out and be Just above right into them in middle income So imagine nine to twelve generations for the US and OECD countries is four point five I say how can this be? There's enough money the solutions are there How do we connect the dots and I really think that they're connecting the dots is right here in this room What you're about to hear and has been taking time maybe ten years to get to where we are in different ways but I do believe in the power of acceleration and I think that Though this workshop is the beginning of of our Co-creation together and we're hoping to for you to really give your most and and please pitch in and help us Continue with these solutions because we want to be able to get people out of poverty in two years or less Not in any generation. So that's the ambition and I think it's been done So thank you Gretchen and that's the title of our workshop. That's what we're working on So we're gonna show how we're doing that But we're also going to do some problem-solving together So can we put the slides back on the screen? There we go So the goal of this session is to tap the brain power in this room to do some problem-solving together as social entrepreneurs We face so many challenges and we would like to share a few of those with you in the form of these case studies That you will see on the tables. They're also in your app on your phone and we are going to problem-solve together as teams and See what great ideas we come up with Before we get started, we'd like to do a poll to actually see who's in the room So we have the poll in the app, but it may Be good just to do the old-fashioned way which is with a show of hands So if you are an investor raise your hand Sorry, I'm not our investors also Okay, so we have some investors social entrepreneur awesome commercial real estate company Excellent and None of the above or some are none. All right so a good solid group that's totally coming from out of the box and Providing their wisdom and ideas as well Great that was very simple. We didn't have to use the app. Okay, so we're going to tee up the four cases and As I said, you'll see them on the table looks like this But first I'll spend some time running through them quickly Each table has different cases So feel free to start taking a look and then also I'll give you some background So case studies one and two are about imperative Camilo's company That Joseph is working with two and we're sorry, and I work with two and The protagonist of this story is a woman named Linda This was Linda's house before on the left and this is Linda's house now on the right So how did Linda move into? That house and she did through an amazing Ashoka fellow named Francesco Piazzetti who Has several innovations that I'll quickly talk us through one is the brick which They call the eco block and how that brick is made is from the dirt that the houses are being built on and The bricks are cold compressed through that blue machine another innovation and That machine is operated by the people who are going to buy those houses So it's a whole it's a little habitat for humanity like and that the community is building these houses collectively with The construction company that Francesco leads so The other innovation is that how the community is designed All the amenities in the community like whether they're gonna have little yards where they can hang their laundry if they're going to have a community space and the design of the house itself is collectively decided by a community committee and Which they make these decisions together So they're already coming together as a community and collectively deciding how they're going to design this community So this investment that imperative makes an HLA Atukasa is one of several so imperative takes a systematic approach to investing and there are actually a whole bunch of other Social entrepreneurs primarily from the Ashoka network that are delivering all sorts of other products and services to these communities To help lift these communities out of material poverty. So water purification systems that are installed in their homes that are financed digital devices internet access and so on and so forth and Because it's a systemic approach that imperative is taking to underwriting these companies It means that imperative is addressing eight SDGs all at once So how the capital works is that there's a there are three Groups of investors that are investing through imperative one is the DFC which used to be OPIC That took you how many years? five years five years It's like 62 days, but who's counting right? Plus private investors plus family offices are all collectively investing and underwriting Loans to a bank that has been set up by Francesco's venture That's a federally insured regulated bank in Mexico and that bank is then underwriting mortgages to Linda So the return to the investors is six to eight percent That's what DFC basically agreed to so this is all the investors are basically getting a return of six to eight percent six to eight percent the bank is Charging an interest rate of eighteen percent That may seem high to us and when we talk about Chattelons, it's gonna seem really high But by Mexican standards, that's actually cheap, but still but the best ROI is for Linda and her family and How Linda is getting an ROI of 32% is because The way that imperative and HLA have set this up Once these homes are built they have to be serviced by the state, which means paved roads electric Water sewer etc. And So these homes after a five-year mortgage are getting appraised at about $40,000 what Linda paid all in with the down payment interest Principal fees etc is $8,000 So her $8,000 turns into $40,000 and that's her asset She has already effectively joined the middle class in Mexico So that's how the model works case study number one though is going to ask us a question That 18% by Mexican standards, it's reasonable But by our standards, we think it's too high and What goes into that 18% is of course the our cost of capital what we're charging, but it also Includes other things in particular the cost of servicing the loan So that $8,000 that Linda is paying in all of those payments over five years 18% of that goes toward a brick-and-mortar Office that's on site in the community That is servicing the loan So there's a staff of people who are going around collecting mortgage payments from Linda and all of her neighbors on the one hand, we really like that team because they are Not all they're part of the community. In fact, they probably live in that community in many cases and That they they keep the delinquency rate really low and they keep the default rate at zero. That's been our Our experience to date so on the one hand they're doing a great job at collecting but on the other hand We'd love for Linda to be able to she saved 18% she would save $1,400 So it's her 8,000 that she paid would be more like 6600 and Her ROI would be that much bigger So that's the first case study is what can we do? To help Linda save money And so Camilo is our guy who's going to be working with our tables that are doing case study number one So the second case study is also about Linda Linda now has a $40,000 asset She also has a credit history She also took financial literacy classes in order to qualify to get the mortgage in the first place and to be able to pay the down payment So Linda is now suddenly an untapped market that's never been banked with before What are the other financial products and services that could be offered to Linda That could be really valuable to her that you never would have had access to before car loans Home equity line of credit business loans is insurance and so forth and What's imperatives role in all of this should imperatives start rolling out other financial products should imperatives start partnering with other companies to do this and How much should we feel responsibility that Linda's not taken an advantage of So that's the second case study Okay case study number three is about elevate and Dimitri So elevate as Dimitri explained buys and operates Manufactured home community of the otherwise known as mobile home parks across the US So I don't know how many people know much about mobile home parks But there are 44,000 mobile home parks in the US That are land lease mobile home parks in 22 million Americans live in manufactured homes Manufactured homes by the way that are made today are just as good just as high quality as What you call a stick build or a site built home? They're built in a climate controlled factory on a assembly line. It's actually amazing to see how they do this and So these are quality homes, but as Dimitri said there's a stigma attached to these mobile home parks But we believe that manufactured homes are a key ingredient in affordable housing. So what does land lease mean? It means you own your house But you rent the land that your house is sitting on you pay a lot rent and so elevate and a shoka Are doing a unique collaboration as far as I know And I certainly know nobody else has done anything with a shoka like this before and this is I still pinch myself that This is happening that we're doing this together so Elevate is Working together with me and my colleagues at a shoka to bring innovations from this network of social entrepreneurs the Francescos of the world to these communities To help these communities develop essentially flex their muscles as change makers essentially and Elevate is contributing a share of the profits Through a donation to a shoka to seed new social entrepreneurs and we're doing this as a pilot in three mobile home parks and So Even with that contribution the charitable contribution that's going to a shoka to fund new social entrepreneurs Elevate is still producing a market return I Thought that was kind of cool comparing it to the S&P that was through The past couple years the market is tanked. We're still doing great So as Dimitri said success and for elevate is when the residents get to the point where they would be able to buy and operate the manufactured home community operated themselves as a co-op and so the ideas and offerings that we're bringing to these communities have to do with essentially creating an owner's mindset and So the sense that being collectively invested in improving the community Because over time if they were to form a rock for example, they would have to form the co-op They'd have to elect a president a treasurer a secretary. They'd have to vote They'd have to decide whether they would buy this multi-million dollar asset and then they'd have to operate it so really creating a sense of ownership and owner's mindset is a key part of Supporting the residents to the point that this is a viable exit for elevate and then also it's That are kind of second main area like Dimitri mentioned is money matters and it's about Supporting the residents in Developing financial readiness through wonderful partners that we've brought through the Ashoka Network that support the residents through Emergency grant circles. We were the first to do that. We were the first to work with Esuzu to bring on-time credit reporting rent payments to improve their credit scores and to provide emergency loans and to Allow the residents to break their rent payments into smaller increments to smooth out the dips and spikes and their income through a wonderful partner called circa The residents are also doing saving circles, which is something that we would are looking to see how we can further formalize an augment So this is all going great. The problem for elevate that we're grappling with is that mobile homes Are not considered real property. They're considered Chattel Which means movable property and yes, that's still the term that they use in the industry So you have to Google Chattel loan and you know apply for a Chattel loan but Chattel loans because They're not considered real property costs dramatically more about twice the price of a regular mortgage So our question that we'd like to brainstorm with the group about is how can we either Securitize collateralize or otherwise help lenders see that this is as good of a loan that they could make as real property and Then finally one more and then we're done and then we're all going to start working together Hopefully you've seen with these residents forming a co-op and then taking initiative in voting to buy the park With the residents forming a community committee to help design the communities with imperative and HLA to Casa you'll see that the thread running through this is this sense of Empowering the communities to be change makers. So our fourth case study is about that We're applying that concept to multi-family. So another partner that Rosario and I are working with is Asking this question, which is about tenant councils. So tenant councils or resident councils Are very common in public housing but very very Uncommon in privately owned and operated properties, but if you do it right you can have It's I think of it like a PTA how the parents are working with the teacher and the principal to try to help the kids get a good great education So for the parents are like yes, we're involved and probably the principals are a little like these parents are a nightmare, right? So I think that's generally the conundrum for these landlords is how do you work with an empowered resident base in your community and Can this become a win-win? So the protagonist of this case study is a wonderful man named Scott who Rosario and I were working with Scott is not here. So Rosario and I are and So we will be floating around now as we're working on these case studies So these are the four case studies The second thing that you see on this table is a hypothesis sheet or a test card So the hope is that as you get together and again try to consolidate if you want to have a conversation with a colleague Or you can do it on your own And we would really really value your ideas. We will be collecting these test cards and we will be using them So thank you so much for sharing your ideas with us The case study should take no more than five minutes if you haven't already looked it over or if I haven't teed it up And we will be floating around to have the conversation with you as you're meeting and discussing and starting to put together a hypothesis solution Any questions Maybe Maybe also just to clarify after we do the case studies and then we'll have a Q&A to be able to go if you have any more questions Questions about the instructions. Yes Now questions about this. Okay, then we'll be answering questions about these wonderful social entrepreneurs and their models So this is our opportunity to share some of our brilliant ideas We will be collecting these hypothesis sheets and we are really so grateful That you are sharing your wisdom with us. I heard some fabulous ideas and I'm excited to hear more But then we really do intend to go around and collect these so if you could leave your hypothesis sheets We would really appreciate it. Feel free to take the case studies with you if you'd like our contact information is in there Would anyone like to share? their ideas with the Group and or if you have questions that you'd like to ask of the group, we would be delighted to answer those as well Anyone anyone and if not if we still are just feeling really inspired and want to continue to problem-solve. That's also great It's okay to share with the whole group. Okay Cool Well, so in ours we were talking about this idea of Lifting whole communities out of material poverty in two years and then what other financial services we could provide in order to make that happen And I guess I was wondering what like what is the definition like what is the delta between where somebody is at when they've? gone from Investing $8,000 now they have a $40,000 asset to now being Materially out of poverty two years later like what is what don't they have at the point when they have the $40,000 asset that they Would then have two years later when they're materially out of poverty. That's my question Good. Well, I think the asset the home asset itself is definitely part of their Material wealth at this point. I'm curious Camilo. Did you hear that question the definition of material poverty? So we see it in two dimensions the first one is having access to what we call universal goods and services and the second one has to be it's associated with being part of the economic system of your The place that you where you live in so we came to the definition Number one because we was when we started the project initially we Didn't agree with the most accepted definitions of poverty for example a minimum amount of income per month per day Because of because of I mean there is enough empirical data to see that sometimes this can fall short when you're actually trying to implement an Intervention program to help eliminate poverty It's been done by the United Nations through the Earth Institute at Columbia University by the way I know that well because I work at Columbia as well So in order to be able to measure the impact that we were having in terms of poverty elimination We came to the following definition rather than by asserting that this is poverty by actually Rejection of the hypothesis. So here it goes If you grew up in a community where you had access to financial literacy You had access to a proper urban development plan You had access to structural housing and they see it's mixed or more adaptive meaning that temperatures control throughout day and night You had access to wire water switch electricity You had access to a comprehensive healthcare system and you had access to proper waste management Why would you consider yourself materially poor? so it's it becomes kind of hard to make the case and Then besides that if in the process of having access to these basic goods and services You manage to the people that we work with our target population Do not have a proof of income and do not have a credit history So if in the process of getting access now to these goods and services you ended up Creating a credit history becoming part of the official banking system of the country And you did it in a way that you generated returns by whatever investment is it that you were making by getting this Net worth of that roughly right now averages at around $40,000 We believe that if not all together or completely some things might be missing Material poverty has pretty much addressed under this under this aspect of Does that answer your question? Speak of five minutes left Who's willing to share their ideas with the group? But it's it or who has other questions that they'd like to ask of our entrepreneurs You guys see me Do it do it Hi, I'm Lisa Hansen Gosh, we had a tough one here with the the tenant the tenant council Discussion is just a complex issue to tackle quickly Anyway, we were discussing how to get the commercial real estate investors to adopt positive view of tenant councils when they view design review as too much trouble And I think we came up with some really good thoughts on this As far as working with the tenant councils in an empowering way extracting kind of the the goals of the community itself and allowing them to self identify what the metrics for measurement would be but then circling back to tie some of those metrics to Research that would allow us to translate those results into investor language So that investors could see that the community driven outcomes are going to result in a better performance of the investment And we also had an angle on that where there's a de-risking element to the employment of tenant councils in that Through the tenant council's self Naming their objectives and participating in the creation of those outcomes We know that it wasn't an outside policy That was sort of detached from the community that we're putting our investment behind We are able to de-risk by connecting directly to the community's outcomes driven by themselves that Kind of cover it That's a fantastic point so from an investor standpoint If you know that this has been a collectively agreed to set of capital improvements or what have you in that community Then you're gonna then you're gonna feel better about your investment that it's going to pay off So that's so having it be investor driven could be a way to get that collaboration happening with the tenants in a community That's a great point so we would love for this conversation to continue and And so we were thinking that we might do this again Yes, so definitely this is a starting point as we walked around the room there's definitely a lot of people That have some direct experience other people are coming new But we think that there's there's a need to accelerate CRE becoming an impact investment only there's it's up gonna be a two hundred and eighty trillion dollar Industry next year globally and less than five percent actually does any impact measurement or initiatives So we're hoping if you're interested to leave your name on the sign-up sheet or you can do it on the app We're hoping of hosting an event in New York Q1 where it would be much more hands-on maybe a day and a half of looking at specific Things that we could move forward and maybe with Other commercial real estate investors in the room and people who also want to bring the systems changed So if you're interested in staying in the conversation Please and we won't spam you with anything else. We won't advertise any products or anything. It will only be To let you know where we're taking this and hopefully we can We can count on on most of you if you're feeling called to stay in the conversation All right. Okay. One last thing Can you please become ambassadors to this you all live in a house or someplace? Maybe you know somebody who lives in an apartment building. Maybe you know an investor. Maybe it's about asking questions Hey, what are you doing about this? What do you think about so we were we're really hoping of of having you as well Go out and be an ambassador to This change Thank you. I don't know if anybody else wants to say anything. Just thank you so much for your participation Again, thank you all and just let you know that we love sharing all our information If you there should be any interest we love to show the entire model We love to show the numbers that we have obtained so far Explain what have been the biggest challenges and also explain which institutions we've run into that have served as well So in the event that we overlap in any of these interests We love to put everything out of the table with transparency hoping that maybe it can also be useful to you So in that respect just make sure that if you're interested you just let us know and we would love to talk to you Thank you. I'd like to thank everyone for participating today sharing your knowledge your feedback your wisdom your resources We're blessed to have you guys all here. So thank you for joining and I look forward to being in contact with all you