Our Financial Health is launching a REIT that will allow small investors in the Harlem, New York community invest in commercial property.
Particularly, the financial wellness organization will concentrate on 422 St. Nicholas Avenue, which is a 10-unit residential property in the city. Our Financial estimates that the asset will rake in an annual return of 4.7 percent.
The overall mission of the REIT is to allow residents to hold stakes in their community and benefit from returns. It calls for investments as low as $1,000, which creates "a pathway for diverse investors to participate," in the market, according to a statement from Our Financial. Moreover, the REIT gives stakeholders a pro-rata share in rental income and allows them to cash out by selling back to the company.
"We believe in the power of community and the importance of keeping ownership local," said Jamel Johnson, managing director at Our Financial.
"This REIT is designed to provide Harlem residents and investors with a meaningful way to build wealth right where they live. It's an opportunity for individuals and families to invest in Harlem's growth while enjoying the benefits of real estate returns."
Also, Our Financial noted that proceeds from a potential future sale at 422 St. Nicholas would be distributed back to investors based on their stake ownerships.
For many Americans, it's been a struggle to find affordable housing, as a recent report from Redfin found that renter households rose by 2.7% in the third quarter to 45.6 million. That represents a growth rate of nearly three times of home ownership. This trend is especially true in New York City, with 49.1 percent of households renters in September, much larger than the national average of 34.4 percent.