Josh Harris, managing partner of the 76ers, has invested $10 million in Philadelphia-based Mosaic Development Partners to help the black-owned company diversify the real estate workforce and promote development in disenfranchised communities.
Harris’ investment goal is to create “the largest minority-owned development platform” in the eastern United States by assets under management, Harris and Mosaic said in a statement ahead of the transaction’s official announcement, scheduled for Thursday.
Mosaic has not disclosed the value of its current holdings.
The cash injection will help company employees complete larger projects — including some outside of the home area of Philadelphia — while directly funding elements of some existing projects, such as: For example, the ongoing redevelopment of the South Philadelphia Navy Yard, said Mosaic co-founder Leslie Smallwood-Lewis.
As part of its agreement with Harris, Mosaic will continue to reach out to communities that have traditionally been underrepresented in the real estate industry for the architects, consultants, contractors, attorneys and other service providers it works with, Smallwood-Lewis said.
“It will allow us to do more of what we’re already doing,” she said. “When we as developers make these decisions about who will be the professional service providers on our projects, we can reach out to those who really weren’t chosen to be part of teams on these high-impact projects. ”
Harris, a private equity executive who owns Harris Blitzer Sports & Entertainment with his partner David Blitzer, was out on Wednesday and could not comment on the deal with Mosaic, but said in a statement that it aims to bring “justice, economic opportunity and long-term conceptual change for all Philadelphians.
“Mosaic is one of the most innovative developers in Philadelphia and is at the forefront of creating a community development model that truly engages residents, expands local workforces and promotes opportunities for equitable wealth creation,” Harris said. “I’m proud to support Mosaic’s effort to expand their work.”
Harris’ equity-focused investment in Mosaic comes amid a growing awareness of how few non-white professionals work in the commercial real estate industry.
NAIOP, an association of commercial real estate developers, does not have demographics on industry involvement, but cited a 2013 study showing that nearly 78% of senior commercial real estate positions nationwide were held by white men, with white women the second largest Proportion occupied , about 14%.
Some efforts have been made to reduce the participation gap.
The city of Philadelphia, for example, this month launched an initiative called the Minority Developer Program, which aims to provide fairer access to the city’s development boom by reserving some public lands for purchase by members of historically underrepresented groups.
Separately, a local consortium of black developers forms “the collective” to solicit private capital while accepting grants from nonprofits and the government. The collective, to which Mosaic belongs, initially wants to raise $100 million.
By building relationships with development partners from diverse ethnic and cultural backgrounds to participate in its projects, and by focusing on neighborhoods that have been largely left out of the city’s recent waves of development, Mosaic has a long history of participating in this equity and diversity drive, Greg said Reaves, the other co-founder of Mosaic.
“Minority companies” brought in to work on projects with Mosaic included Hispanic-owned Rodriguez Consulting and Moody Nolan, the largest black-owned architecture firm in the country.
Mosaic’s projects have included 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 independent of Harris’ new agreement with Mosaic. Harris first met Mosaic in 2020 when they joined the development team on his ill-fated bid to build a new basketball arena at Penn’s Landing as part of the Delaware River waterfront redevelopment.
In July of this year, Mosaic, along with Long Beach, Calif.-based Ensemble Real Estate Investments, was selected to lead the next phase of the Navy Yard’s redevelopment, a $2.6 billion initiative that will also include the former military base’s first apartments to include more laboratories and offices.
Ensemble developed Navy Yard’s Marriott Hotel and the Hilton Garden Inn on the Camden waterfront, and its Philadelphia operations are largely run by former executives of the now-acquired Liberty Property Trust, which owns both of Comcast Corp’s Center City high-rises. has developed and other major projects.
Such large developers tend to have their own established networks of contractors and other collaborators that may not include representatives from the diverse backgrounds Mosaic has been working on to bring into their fold, Smallwood-Lewis said.
With the Harris investment, Mosaic should be able to build its capacity to work on projects with ever-larger development groups, which will also have the effect of increasing the capabilities of its diverse real estate professionals, she said.
“We are building strong relationships with minority and women-owned businesses,” said Smallwood-Lewis. “Now they’re in the mix: they get ongoing projects from us so they can start strategically planning their growth.”