Impact Investing in Real Estate Private Equity | FCP

Today, Alecia will share with us her outlook for Impact Investing in real estate, private equity, including the greatest opportunities and challenges, along with her experience being a woman in the industry and more. Hi Alecia. Thank you so much for being with me today.

Alecia Hill:

Thanks for having me, Elana.

Elana Margulies-Snyderman:

Absolutely Alecia. So to kick off the conversation, tell us a little about the firm and how you got to where you are today.

Alecia Hill:

Absolutely. So FCP, we're a real estate investment company with over 25 years of track record investing in more than 12.9 billion in assets since the firm's inception. And we really focus on real estate across the board but are very much a multifamily owner-operator. We own and operate over 25,000 residential units today, and we significantly also do quite a bit of work in the workforce housing area and also in the area of naturally occurring affordable housing.

We consider ourselves real estate people first and foremost and really try to be very thoughtful in our approach and our work, and we take a hands-on owner-operator approach overall. And then, for me specifically, I really focus on the firm's efforts as it relates to Impact Investing and advancing initiatives around the preservation of affordable housing.

Elana Margulies-Snyderman:

Great, Alecia. That segues into the follow-up question I have for you. Given your focus on Impact Investing in real estate private equity, I would love to hear your high-level outlook for the space.

Alecia Hill:

Yes, so I think it's a great question, and it's one where, in the last recent months, the last 18 to 24 months, the market environment has really been unprecedented. And as it relates to Impact Investing in real estate private equity, I would say that generally speaking, amidst all of that and all of that sort of unprecedented change, we're really seeing some compelling positive trends that bode well for the future. I would highlight a few themes.

One, cross-sector momentum. There's this intersection within the Impact Investing space between people, place, and environment, and by executing within the real estate segment, that really gives us an opportunity to really think about all of those attributes when we think about where we're buying, what type of assets we're buying, and then also what our business plans look like.

You're seeing from a policy standpoint where there's opportunities to support social impact things as it relates to preserving more affordable housing. You're also seeing opportunities to think about the decarbonization efforts overall, and you're seeing some actual financing tools and programmatic opportunities to pair both private investment capital, along with some of these other elements to find and unlock good opportunities for investing.

Elana Margulies-Snyderman:

Alecia, on the other hand, what are some of the greatest challenges you face in your space and why?

Alecia Hill:

So the need's never been greater. Today, we are facing an unprecedented housing shortage. We're several million units short to really meet the need, and we're in an environment where the cost of capital to be able to finance these types of deals is just significantly higher than what we've seen in the past.

So you are seeing fewer deals that are financially feasible today, particularly from a development standpoint. You're also seeing overall that the demand from the investor side continues to be there, but it is changing, and there are other opportunity cost elements that have to be considered overall. I will say, though, that despite the challenges, there's a very compelling business case supported by the fundamentals of the multifamily space that really do support continued interest long-term.

Elana Margulies-Snyderman:

Alecia, to shift gears a bit, being a woman manager in this space is clearly an inspiration, and love for you to share your experience and what you're doing to inspire others to follow in your footsteps.

Alecia Hill:

So, for me, as a woman in the industry, and particularly as a Black woman as well, really thinking about the support system that I have benefited from throughout my career is very meaningful. And so I endeavor to try to provide that where I can to others. I would say that it's not a secret. There aren't very many women that are in the industry overall, which presents a great opportunity to increase representation writ large. It's a great opportunity to do that.

That being said, I really look at my position and take the approach that this is an opportunity for me to bring my gender, my racial identity, my career journey and really use that as the basis for how I show up, showing up authentically, taking up space that honors my commitment to the work that I'm doing in Impact Investing, my discipline, my values, and most importantly ensures that I can execute with excellence and be an effective leader and collaborator alongside of the talented colleagues I'm fortunate to work with. And then also, of course, for the residents that we serve and then also for the investors that we work with.

Elana Margulies-Snyderman:

Alecia, we've covered a lot of ground today and wanted to see any final thoughts you'd like to share with us.

Alecia Hill:

Sure. I would simply encourage, to the greatest extent possible, that stakeholders that have an interest within the Impact Investing space really think about the compelling opportunity that exists there. It's not only about making a difference and providing impact, but you can also do that while creating compelling investment opportunities as well.

We do that through the real estate lens, but I think there's going to be increasingly an opportunity, particularly in alternatives for investors and stakeholders that have an interest to really think about how their interest on the impact side pairs well with just market-based fundamentals that support the business case for making smart investments overall.

Elana Margulies-Snyderman:

Alecia, I wanted to thank you so much for sharing your perspective with our listeners and thank you for listening to the EisnerAmper podcast series. Visit eisneramper.com for more information on this and a host of other topics. And join us for our next EisnerAmper Podcast when we get down to business.

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