Investment capital that works for everyone
What your investment will do
To finance the acquisition of mixed-income multifamily properties, the Impact Pool intends to invest primarily in tax-exempt junior mortgages and mezzanine loans. Each loan is expected to provide up to 30% of total project costs. Most loans will have a term of up to 10 years and be interest-only until maturity.
At least half of the Impact Pool is expected to be invested in Washington, DC.
Your targeted returns
The Impact Pool will seek net returns to investors of 7%, a level comparable to the net return target of a typical investment fund. Returns above the 7% threshold are donated to the Washington Housing Conservancy. A typical investment fund would need to generate an IRR of more than 12% to provide its investors with an equivalent after-tax return. JBG SMITH Impact Manager takes no share of the profits.
The Impact Pool intends to exit its typical investments through a refinancing of both its mortgage and the senior mortgages at the end of the loan term. Due to amortization of the first mortgage, the Impact Pool expects to be able to achieve its target returns without the sale of the underlying property—a key aspect of the self-sustaining nature of the Washington Housing Initiative and a critical aspect of bringing stability to the communities where we invest.
Impact Pool investments deliver significant risk mitigation thanks to several advantages, including:
Discounted first mortgage financing
Potential exemption from property and sales taxes
Reduced vacancy, credit loss, and lease-up risks due to lower rents
Growing asset value over time relative to income due to below market rents in high-impact locations
The Washington Housing Conservancy guarantees all loans to support its projects
First mortgage amortization covers Impact Pool principal
A respected manager
Impact Pool investment management, reporting, accounting, and administrative support is provided by JBG SMITH Impact Manager, a subsidiary of JBG SMITH Properties. No promote or management fees will be paid to the Manager in connection with the Impact Pool. The Manager will be reimbursed for its expenses, with annual expenses capped at 2% of committed capital.