Black-owned Philly developer Mosaic gets $10m from Sixers’ Josh Harris to expand
76ers managing partner Josh Harris has invested $10 million in Philadelphia-based Mosaic Development Partners to help the black-owned company diversify the real estate workforce and spur development in disenfranchised communities.
Harris’ investment goal is to create “the largest minority-owned development platform” in the eastern United States as measured by assets under management, Harris and Mosaic said in a statement before the official announcement of the agreement, scheduled for Thursday.
Mosaic did not disclose the value of its current holdings.
The cash injection will help company staff manage larger projects — including some outside of its Philadelphia territory — while directly funding elements of some existing projects, such as the ongoing South Philadelphia redevelopment. Navy Yard, said Mosaic co-founder Leslie. Smallwood-Lewis.
As part of its agreement with Harris, Mosaic will also continue to reach out to communities traditionally underrepresented in the real estate industry for the architects, consultants, contractors, lawyers and other service providers it works with, Smallwood-Lewis said. .
“It’s going to allow us to do more of what we’ve already done,” she said. “When we as developers make these decisions about which professional service providers will be on our projects, we’re able to reach those who really weren’t selected to be on the teams for these impactful projects. ”
Harris, a private equity executive who owns Harris Blitzer Sports & Entertainment with his partner David Blitzer, was traveling on Wednesday and could not comment on the Mosaic deal, but said in a statement he was aiming to move forward ” equity, economic opportunity and long-term change for all Philadelphians.
“Mosaic is one of Philadelphia’s most innovative developers and a leader in pioneering a community development model that truly engages residents, expands local employment, and fosters opportunities for equitable wealth creation. “Harris said. “I am proud to support Mosaic’s ambition to expand its work.”
Harris’ equity-focused investment in Mosaic comes amid growing awareness of how few nonwhite professionals participate in the commercial real estate industry.
NAIOP, an association of commercial real estate developers, does not have industry participation demographics, but cited a 2013 study showing that nearly 78% of high-level commercial real estate jobs in the nationwide were occupied by white men, with white women occupying the second largest portion. , about 14%.
Efforts have been made to reduce the participation gap.
The City of Philadelphia, for its part, launched an initiative this month called the Minority Developer Program, which aims to provide fairer access to the city’s development boom by setting aside public land for purchase by members of historically underrepresented groups.
In addition, a local consortium of black developers forms “the collective” to solicit private capital, while accepting grants from non-profit organizations and the government. The Collective, which counts Mosaic among its members, aims to raise $100 million initially.
By connecting with development partners from a variety of racial and cultural backgrounds to participate in its projects, and by focusing on neighborhoods that have been largely left behind by the city’s recent waves of development, Mosaic has long been involved in that equity and diversity drive, said Greg Reaves, Mosaic’s other co-founder.
Among the “minority business firms” brought in to work on projects with Mosaic are Hispanic-owned Rodriguez Consulting and Moody Nolan, the nation’s largest black-owned architectural firm.
Mosaic’s projects include the Golaski Labs apartments, in a former medical supply factory near Wayne Junction in Germantown, and the Sharswood Ridge retail and public housing complex in North Philadelphia, which is being developed in partnership with Shift Capital.
Harris Blitzer Sports & Entertainment was an investor in Sharswood Ridge, separate from Harris’ new deal with Mosaic. Harris first became acquainted with Mosaic in 2020, when they joined the development team as part of its ill-fated attempt to build a new basketball arena at Penn’s Landing as part of the redesign of the shoreline site of the Delaware River.
In July of that year, Mosaic was chosen along with Ensemble Real Estate Investments of Long Beach, Calif., to lead the next phase of Navy Yard redevelopment, a $2.6 billion initiative that is expected to include the first apartments of the old military base in addition. to more laboratories and offices.
Together developed the Navy Yard Marriott Hotel and the Hilton Garden Inn on the Camden waterfront, and its Philadelphia operation is largely run by former executives of the since-acquired Liberty Property Trust, which developed the two downtown skyscrapers from Comcast Corp. and other major projects.
These large developers tend to have their own established networks of contractors and other collaborators, which may not include representatives with varied backgrounds that Mosaic has worked hard to bring into its fold, Smallwood-Lewis said.
With Harris’ investment, Mosaic should be able to strengthen its ability to work on projects with ever-larger development groups, which will also increase opportunities for its diverse stable of engineering professionals. real estate, she said.
“We are forging strong relationships with minority and women-owned businesses,” Smallwood-Lewis said. “Now they’re in the loop: they’re getting ongoing projects from us so they can start strategizing for their growth.”