Here at Fundrise, our main mission is to help you earn better returns. We aim to provide a superior alternative investment for investors who are disappointed with the subpar yields commonly offered by traditional investments. And, as our track record shows, we’ve consistently outperformed our traditional counterparts.
Building a well-balanced investment portfolio is a necessary part of preparing for important life milestones, such as purchasing your first home, sending your kids to college, and — eventually — retiring. However, we understand that investors care about more than just making money.
Even as excellent returns remain our principal goal, our investors frequently tell us that they want to put their dollars to work in ways that can have a positive impact on the environment, communities, and nonprofit organizations. Like our investors, these causes are close to our hearts, too.
As a trusted investment sponsor, our first duty is to find investments that offer strong risk-adjusted returns, so that we can maximize our investors’ yields while limiting their downside exposure. That said, where possible, we endeavor to find opportunities to have a positive impact on local communities and environments where we do business.
Protecting the Environment
Real estate development plays a critical role in shaping our physical surroundings. That doesn’t just refer to the the concrete, brick, and steel structures cradling city-dwellers — real estate has much wider, environmental impacts. Responsible development hence has enormous potential to help build a cleaner, more sustainable world, and this potential has not been lost on us.
For instance, the Fundrise Income eREIT has invested in Elysium Fourteen, a LEED-certified building in Washington, DC, built using eco-friendly construction.
According to a U.S. Green Building Council report, LEED buildings typically reduce energy use intensity by nearly one-third, thereby mitigating greenhouse gas emissions. Moreover, Elysium Fourteen is just one example of our focus on investing in multifamily properties within dense urban cores and close-in suburbs. This strategy in general is believed to help significantly reduce greenhouse gas emissions by reducing sprawl and reliance on vehicular transportation.
In many ways, the District of Columbia’s burgeoning H Street corridor serves as a microcosm for the ways in which development can transform and elevate communities. Despite past struggles, the corridor is now bustling with a low-cost trolley line, boutique storefronts, and more. The corridor has also welcomed the projects of vanguard restaurateurs, such as Erik Bruner-Yang’s Maketto at 1351 H Street NE — Fundrise’s first investment offering.
That said, a common and justified criticism of such community transformations is that a rising tide sometimes fails to lift all boats.
We believe that incumbent residents of communities should be helped — not hurt — when new, substantial investments start changing the neighborhoods around them. That’s why we pioneered a novel model of public-private partnership just down the street from Maketto, where we assisted in the anticipated construction of 33 affordable apartments and nearly 6,000 SF of retail space, at the corner of 13th and H Street NE.
With units slated to rent for 30-50% of the area median income, this project is intended to help keep locals in their neighborhoods, so they can continue to add their voice to the city and its changes, rather than find themselves pushed out by rising property values.
Supporting Worthy Causes
While all real estate developments create jobs, we aim to go a step further by generating employment opportunities for groups that specifically aim to effect positive social change.
Homeboy Industries provides services and employment opportunities to former gang members and the previously incarcerated, and has had a dramatic impact on gang violence reduction in Los Angeles.
Run by Father Greg Boyle, Homeboy has become the world’s largest gang intervention and rehabilitation program. We admire the scope and ambition of their work, and hence hired Father Boyle and his team to perform the project demolition for our first eFund investment, La Vista, a neglected single-family home in Los Angeles that was acquired for redevelopment.
Making Investments of More than One Kind
At Fundrise, our education materials frequently explain how investing in private real estate can generate residual or passive income. Rather than letting your cash sit in the bank and lose value to inflation, or barely beating market returns through the use of traditional ETFs or robo-advisor portfolios, we encourage investors to understand and leverage the power of passive investing in private alternatives, to make their money work for them.
The powerful discovery that we’ve made as an investment sponsor is that, while making your money work for you, you can simultaneously make it work for the environment, communities, and important social initiatives.
The primary goal of an investment may be to earn returns, but that doesn’t mean that it can’t also enrich the wider world. Real estate, in particular, has the opportunity to make ripples in the spaces around it — after all, it’s literally transforming neighborhoods.
As a prudent steward of assets, we design our investment products to maximize risk-adjusted yields, first and foremost. But if you could maintain or even improve your portfolio’s performance while making the world around you a better place, why wouldn’t you?