CJ (Moderator): You’re about to hear 45 minutes of the most insightful, impactful panel you’ve ever witnessed. So yeah, there you go. You’re going to run right out and flee and start making investments based on this, and also work with these individuals. So, without further ado, we’ll wait for people to straggle in.

Quick question: How many of you actually understand, know what is, or are involved in impact investing? Show of hands, please.

Audience: (Some hands go up)

CJ: Okay, that’s typical. Fine, great. Even more open space for us, more wide space.

Impact investing is someone, or an investor, or a strategy that invests to make a positive, measurable social impact as well as financial returns. And that’s what we’re here to talk about. So, without further ado, I’m going to introduce the panel.

CJ: Martin Mu, did I pronounce that right?

Martin: Martin.

CJ: Thank you. Martin is the founder and managing partner of the Sola Impact Family of Social Impact Real Estate Funds. Sola Impact’s funds are the largest purchaser of real estate in South LA. That’s quite a statement, okay.

Chris (I know previously, full disclosure, is the Chief Investment Officer for Realty Mogul). I’m sure most of you have experienced Realty, overseeing underwriting, closing, and asset management for the firm’s debt and equity investments. Thank you, Chris, for being here.

Rooshan Sonalia, I’m on a break. He is the Managing Director and Senior Counsel at Turner Impact Capital, working on Turner Impact Capital’s various funds focusing on investor relationships, relations—excuse me—acquisitions, and asset management.

Kate KAC—also okay, that was one easier. Kate leads the origination team at Nuveen. By the way, I just kept calling them Pim Nuveen before—very embarrassing. Origination team at Nuveen Green Capital. Her team works with building owners, developers, contractors, and other industry professionals to improve their business returns through the use of Commercial Property Assessed Clean Energy (C-PACE), which I’m actually going to ask you specifically about in a bit.

Matthew gets to introduce himself as long as he likes because I forgot to write it down.

Matthew: Matthew Gorman with BentallGreenOak, Managing Director that oversees acquisitions for our Southwest region effectively. We’re a roughly $80 billion AUM global private equity firm allocating across the capital stack.

CJ: Thank you, that was exactly the right length, thank you.

Okay, let’s jump right into it. We’re going to be more or less conversational. I’m going to put questions out to the group, anyone can jump right in, and then we’ll just riff off each other. I hope that works for everybody.

First question: What is the primary driver for your interest in impact investing? And do you see it fitting into a larger portfolio of traditional investments and charitable activity? You know what, why don’t we start with Martin? I think that’s right up your alley.

Martin: So, first thing is, we’re not an impact fund. And folks go, “Wait, wait a second, why are you on that panel?” Well, over the last year, we went out to raise our fourth fund and went to a number of institutional investors. We started our introduction by going, “Hey look, we’re Sola Impact. As the name implies, we’re an impact fund.” And they were like, “Yeah, we don’t have that category. Why don’t you go over here? Why don’t you go over there?” And then after about three to six months—we were slow learners—we realized this category is not really a category.

Therefore, we really are a real estate development firm focused on affordable and workforce housing. It so happens that we do a tremendous amount of impact, and that has always been part of our DNA. But as a category, most institutional investors are still scratching their heads. So, that really is the counter. What we focused on is explaining to institutional investors how we make really good returns. I say, “Look, we invest not only where the sidewalk ends, but we invest exclusively in Black and Brown communities for all the right reasons and some of the wrong reasons,” right?

Which means that we think these are communities that really need high-quality affordable housing. They need a number of services to constituents that have been historically overlooked and underinvested in. But, as a result, the real estate assets in these communities are mispriced relative to the perceived risk. We have built a business to be really good operators in those communities and really mindful of the community impact. So, at the end of the day, yes, we are an impact fund. But, if you ask me, depending on who asks me, we’re just a real estate fund that is aiming to achieve at-market or above-market returns.

CJ: Okay, so you’re trying to equalize both the financial return aspect as well as the social impact, but you coincidentally self-identify with a demographic where you feel that you can make the greatest impact, and thus your definition of Sola Impact, correct?

Martin: Yes, correct.

CJ: All right, understood, great. I think this is actually a useful foundational question to ask everyone, so I’m going to ask the same thing. In case you didn’t read, I’ll say it again because I think it does explain what each of you do and how you define yourselves in your group.

What is the primary driver for your interest in impact investing, and how do you see it fitting into a larger portfolio of traditional investments that each of your organizations do? BentallGreenOak, Nuveen, very large, and charitable activity as well.

Chris: Um, well, for me, it was very personal. I’ve got two little, very socially active girls, and one day they’re going to ask me, “You know, what did Papa do to, you know, prevent the world from imploding?” And I’d like to have some answer for it. So, um, I got very frustrated that, you know, our industry represents about 40% of the carbon output in the world. And, um, you know, I was very frustrated by the lack of activity and actually the amount of climate denying that goes on. And then I looked in the mirror and said, “Well, wait a minute, I’m the CIO of one of the largest fintech companies in our industry. Why aren’t I doing something?”

So, I proposed it to the Realty Mogul executive board. They loved the idea. We set off our team to find, um, impact investments. We’ve, uh, so far launched two really exciting projects: the largest solar array on a multifamily property in Texas and the tallest timber building in the world. They’ve both been through our platform. Both of those deals were great returns, very impactful, and, um, you know, really exciting to be part of.

CJ: Were the financial returns equal to the environmental impact?

Chris: Well, I think the Texas multifamily property, which was called Woods at Ridgemar, the solar array actually was incremental to returns. It actually boosted the IRR by about 150 basis points on a project level. That was largely due to incentives, but, you know, it’s very difficult—it’s shockingly difficult—to get solar on a multifamily property for all sorts of regulatory reasons. But yes, and I think they built out the whole array in about 6 months, and I’m trying to convince them to put it on the market. It would be an outstanding return.

CJ: Thank you, Chris. So, so far, we have social and demographic from Martin, and we have environmental from Chris. Roshan, same question.

Roshan: So, for us, it’s a lot like Martin, I think, in terms of—we are an impact firm, but, uh, when we go out to investors, we can’t always say “you’re not always an impact firm.” People want return. For us, we have investors on all different ends of the spectrum—some who really like investing with us as a defensive investment compared to opportunistic investments. But then you also have philanthropists who want to make a difference but love the fact they’re able to make an investment and get a return at the same time. We’re investing in underserved areas: education, medical, and workforce housing, and doing each of those in areas that, again, we’re making an impact, but we are not necessarily focused only on impact.

CJ: Okay, so when you’re making that decision on a project or on an asset class, how far up the criteria chain is the social impact? Should we present workforce housing if its returns are not aggressive enough, or they’re not matching the capital that is a value add, but it is a solid return and the social impact puts it over the total return?

Roshan: For us, it’s a balance, and you have to have both. You can’t pick impact only, or you can’t pick investing only. It’s impact investing, and you have to have both.

CJ: Okay, since you mentioned a few asset classes, how many of your investors actually ask about it when you do? Do you self-identify front-facing as an impact-oriented firm in real estate?

Roshan: We do, and I’d say if not all, almost all ask about it.

CJ: Thank you. Anecdotal evidence of the demand for impact investing in even real estate. Again, now, the Giants. Kate, I’m sure I don’t have to say the question again.

Kate: We were started by two women—Greenworks Lending. We started in 2015, so we were recently acquired about a year ago by Nuveen, and we were rebranded as Nuveen Green Capital. Nuveen has a sustainability mission, a net-zero mission, and we do C-PACE financing, which is Commercial Property Assessed Clean Energy. So inherently, we have an environmental impact. Each of our dollars goes to energy efficiency, seismic, water resiliency, um, and so inherently, we do have an environmental mission.

CJ: Okay, great. And, um, across asset classes, or are you specific? Agnostic across asset classes?

Kate: Um, we’ll finance anything as long as it’s environmental or efficiency measures going into a building. It could be new development, it could be a retrofit of a building, so new HVAC, lighting, windows.

CJ: Interesting. So you’re the only one here with—well, I’m not sure about Matthew; he’s going to tell us—on the debt side of the equation.

Kate: Yes.

CJ: Interesting, great. And do you have something as specific as a scoring for a project analysis?

Kate: A scoring?

CJ: Well, to score the relative ESG componentry of a project.

Kate: Right. We go through a technical analysis to make sure that each of the measures going into the building is generally to code or better. It depends on the program; it varies state by state and county by county, depending on the program. But generally, it’s to code or better.

CJ: Interesting. Is that separate from LEED Platinum or Silver?

Kate: It is. LEED is definitely a higher standard than what C-PACE is eligible for, but it also makes good business sense, as you were saying.

CJ: Yes.

Kate: Because it’s fixed rate and long term. We’re fully amortized over 20 to 30 years at a fixed rate, and so in a rising rates environment, it’s particularly attractive.

CJ: I have a feeling Nuveen made that crystal clear at the acquisition table for your firm.

Kate: They were interested, and they very much leave us alone to do what we do because we do it well, and they want us to succeed and just continue to lend.

CJ: Great. Thank you. Giant number two, Matthew, BentallGreenOak.

Matthew: Yeah, I would say, um, similar to Martin. We do not have any specific impact funds today. We’re a diversified vehicle from core to value-add. Um, that will be changing probably over the course of the next year. We are planning a couple of specific vehicles that are targeting impact-only investments. But focusing on why it’s important for our firm, I, you know, I would say this has gone back many years, both from, uh, an internal perspective as extremely important for our CEO, all the way down to the junior people we are recruiting.

But I would say over the last couple of years—and I’ll turn this to more of a capitalist perspective—our investors are demanding it. I think we’re very much hearing vocally that they want to see ESG-related impact investing throughout what we’re doing, um, as best we can. And that obviously varies based on product type. The core, longer-duration stuff can have more of an investment into, you know, solar or longer-dated projects like that. Whereas, I think our value-add, which is a little bit more of a three-year hold, you know, we’re focused far more on programmatic or programming and social, so social good at these investments.

But, um, you know, over the last year, we’ve hired an entire ESG department, effectively several people that report directly to our CEO. Um, you know, we have an internal scoring of about 75 to 100 questions, I believe, for every asset. We go rank them all the way down, um, and that sticks with the asset into asset management and is constantly reassessed. And as we learn more about it, we end up learning a lot more about the asset after we own it, actually. There’s stuff we can do there too.

CJ: So, what’s the Rubicon? What’s the passing grade on that number?

Matthew: I, you know, I mean, that’s the—that’s the tough part. I think this is a, um, it’s—it very much varies by asset class, location, and the type of capital we’re investing in. I think what our goal is to create over the next year or so is a very defined score for where kind of impact we’re having, especially within our funds and the asset classes we’re doing, and trying to roll that all up. So, we’re trying to institutionalize a very opaque—what has so far been a very opaque industry.

CJ: You know, for both of you, especially given that you have access or you see so many more larger capital investors, is it a luxury where you see the larger investors able to request, demand, in certain cases, versus, you know, the family offices of, you know, maybe 5 to 10? Uh, is it something that is up and down the size of the capital stack or your investor size that requests? You mentioned that they are requesting it from the capital, so I’m curious if ESG is still considered a luxury.

Panelist: I can take that. We very much see a push-pull, um, with tenants and investors wanting that ESG component. So, it could be a small office, it could be a large investor, um, but we see a push-pull—tenants wanting a more energy-efficient building, investors wanting that ESG component. But then we’re also seeing communities, states, local governments really instituting penalties, um, so that property owners have to really upgrade their buildings to an energy-efficient standard.

CJ: Okay, alright. So, we’ve had a very good variation of the goals and objectives. One thing I didn’t hear—I’m just going to make this rhetorical and come back to it—is governance, the “G” in ESG. And I—I’m always intrigued by that. I think fintech has an opportunity at it. We’ll come back to that. I want to ask something a little bit more specific. You mentioned it—this is open to the group—what are your financial objectives vis-a-vis your social? Let’s get granular. What do you think is acceptable to investors who invest in impact investing or require it?

I’ll start at the far end because we already sort of did a version of that question. Um, I don’t think it’s necessarily value-destructive to do ESG investing. And I, you know, maybe, maybe you’ll have a different view on it if you had a very specific vehicle that was only targeted towards impact and trying to turn very specific things around. But for our fund, we are still very much fiduciaries to our investors, and we’re trying to generate the returns we promise and exceed them.

Matthew: You know, I can give some specific examples, I guess, of how we’ve kind of looked at it in deals. In Arizona, for example, in Tucson, we’ve invested in multifamily, and we’ve, um, really looked at an asset and saw that the demographic was family-oriented. Um, and we looked at a ton of, um, uh, I guess, social programs to add to the asset that was beyond just replacing countertops and value-add kind of upgrades that would normally push rents. We looked at, you know, really enhancing security, um, creating an after-school program that brings in a tutor to basically a dead amenity space because, quite frankly, most of our demographic was Hispanic immigrants, and their parents couldn’t, um, speak English and help them with their homework after school, and they needed that—they needed that assistance.

CJ: Specific question: Did you do it for revenue enhancement because you thought it would improve the rental, or did you do it for an ESG score, or is it the right thing to do?

Matthew: Uh, it’s, well, all of the above. I mean, I would say, you know, the interesting thing about all this is that the rents you end up achieving at these places can far exceed your competition when you bring a holistic package to it. Now, it is really difficult to say for that specific example what’s our ROI. Um, I think we kind of look at it holistically, and we see in our performance and know that the overall impact is greater than the specific investment itself.

CJ: Thank you. Martin, a version of that question: when you speak to investors—we all do—and capital, what do they consider acceptable when you discuss impact investing or what your mission is? And what is the expected time frame for that to be considered acceptable, in terms of financial returns and, of course, social?

Martin: Um, I think that’s a good question. You know, we, we, uh, project double-digit returns. We’ve been able to achieve that across multiple funds, and in case there are any attorneys, I’m not going to specify specific numbers because we still have an open fund just about to close. But, um, you know, I think the, the, uh, I want to push on one thing which I think you’ve heard here, which is we fundamentally do not believe that you have to choose between social returns and financial returns. And I think there’s certainly still a very common perception out there that you have to get concessionary returns in order to do true social impact. We feel it’s actually the opposite—that if you’re strategic, intentional, and intelligent about it, your social investments actually improve your financial returns.

And you and I spoke about, you know, dozens of examples candidly. But during—I’ll give you one during COVID. Um, you know, I remember two years ago in April when we thought the world was going to stop. Um, and our—we serve a very sort of, uh, low-income community. 98% of our tenants are African-American and Hispanic. These were folks that were going to be disproportionately impacted by COVID. These were entry-level jobs and workers. And so, we have a 10-person team that we fund ourselves—a 10-person social impact team. They worked with our property management team, um, day and night to catalog every federal, state, and local program for rent assistance, for foreclosure avoidance, for financial assistance. We cataloged all of these programs that were out and available. You know, for many of us in the room, filling out an application to get that would be fairly straightforward, but if you are a restaurant worker who had just been laid off due to COVID and needed to get a letter faxed from your boss saying you had been laid off due to COVID, it was overwhelming, right?

And so, that ended up helping our tenants get access to over a million dollars of rent assistance. Yes, we had a dog in the fight, right? We, um, you know, were pragmatists, but we didn’t do it simply for financial returns; we did it because it was the right thing to do. But as a result, we were able to collect over 95% of our rents during a very challenging time. Um, and the list goes on, but I think that, again, when we look at the framework of our impact—which is the bedrock of affordable and workforce housing, but extends beyond that to access to education through technology, access to capital for minority and BIPOC entrepreneurs, access to homeownership—these things ultimately pay dividends. And in many cases, you can measure them; in some cases, you can’t. But the underlying notion is, look, the better our tenants do, the better we do. And so that’s really the underlying premise of our impact work.

CJ: Thank you, Martin. I have a “rubber hits the road” question, hypothetically, because this would never happen to you, of course: you have a zero return—not that you have a zero return, but your social impact in that specific either fund or project was undeniably enormous. Yes, how would your investors feel about that?

Martin: Not great. We’d never—you know, we would not do those projects.

CJ: I said it wasn’t going to happen to you!

Martin: Thank you for not wishing it on me. It was just hypothetical.

CJ: Yeah, no, it—I think that we don’t—we don’t prioritize that, meaning that we’re not—you know, I think we continue to maintain that you can have both.

CJ: So, great, thank you.

CJ: Chris, I want to ask about the timeframe. RealtyMogul is, um, the largest fintech—although I wasn’t going to argue that given that we’re in the same, we’re in the same cohort and in the same category.

Chris: One of—We’re definitely not the largest.

CJ: Okay, um, and then I’ll make sure I say we’re not the largest either. Um, timeframe and quantifiability—measurement of the impact. So, if it’s a stated goal—one of several returns, obviously capital appreciation, equity multiple return, all goals—if the social impact is one of those, does that change the timeframe, the exit parameters? And how do you measure that?

Chris: Well, I mean, with the solar array, um, I mean, that’s fairly easy to, uh, to, um, to evaluate. Um, I mean, we have—there’s lots of data on what the electric usage and costs were before. And, um, you know, we closed on that property n months ago. Um, the array is completely built out, and you know, they’ll have that data available. Um, and so, we’ll know pretty quickly the impact on NOI.

Does it change the hold? Um, you know, it’s tricky because a lot of sponsors, um, you know, if you work hard to create that, you know, you don’t—a lot of the GPs, um, well first of all, there’s a certain skill set in managing it. Um, we have here today, uh, Richard Hanam, CEO of Forge. I’m—they’re about to deliver, um, a very high-tech, um, and sustainable project in San Francisco. Very few people will know how to manage that, um, to really maximize the value.

Um, but, you know, I think that personally, if I were that sponsor of the solar array—they’re a newer group, they’re looking to build a track record, they got a great buy, and, you know, a huge value uplift—personally, if I were them, I would, um, I would pull the trigger and sell it. Um, you know, because managing a solar array is probably not quite as complicated as, you know, some of the stuff that Forge is doing.

CJ: Thank you, thank you, Chris. A version of that question for you, Roshan. Does the time—the hold period—get affected by the overall social goals? If the return goals are achieved, but the social may not be complete, would that affect your decision? And how do you measure with two sets of goals, hopefully in tandem—how do you measure success on your exit strategy, whenever that is or has been?

Roshan: Well, um, social measurement starts on day one, quite—especially when we’re doing development. So it’s in an underserved community, so we’re creating construction jobs, and we, uh, try to hire and engage with, uh, minority subcontractors, women, minority-owned, uh, businesses. So it’s a—it’s a day one project to start off. And then, um, in terms of financial goals, um, we’re fiduciaries to our investors. And again, we’re—you’ve heard it a couple times already—we’re not separating investment returns from social returns; we’re doing both.

And there is a business plan, but, uh, sometimes you deviate from it if, uh, the financial returns are good or if the social returns, uh, are there. But you’re not going to sit there and say, “I can’t sell this property because we haven’t hit our social returns.” And especially in our funds where we do education and healthcare—we’re facilitating the operators to own these pieces of real estate. So for us, the social and financial are kind of woven in together, so that when they—they can buy the properties from us, and that means they’ve achieved financial returns because they have stability to actually buy on their own.

CJ: Fair enough. And I want to get back to the governance question. Uh, we spoke about investors, we spoke about capital. We have two of some of the largest, uh, capital raisers here on the panel, who work for firms that are two of the largest. What—this is a, this is a personal, uh, interest and passion of mine—when speaking about ESG and impact investing, access to these great deals, the governance component, how many of your investors would be considered non-accredited? What percentage would you consider it? I—I know Matt’s already—his eyes are already, uh, rolling back. I understand. I get that. But it’s still a question of governance, access, accessibility, inclusivity on the financial returns as part of a governance play. What do you think, in terms of your own experience, or maybe in the future?

Roshan: Uh, I know for us, uh, we—we’re all accredited investors because you can’t go solicit investors—I’m not an SEC lawyer—but you’re not going to—you can’t just solicit to, uh, people who are not accredited.

CJ: And you’ll be happy to know I play one on TV though.

Roshan: Okay, good. So, that’s the reality, unfortunately, of when you’re raising capital. You’ve got—you do have to have, I believe, accredited investors.

CJ: Okay. Well, again, this is a personal feeling about inclusivity, on the value of the social and the merge of the social and the financial—that both the people you’re helping with the end use should also benefit financially from the great work that you’re individually doing. So, that’s why I had to put that question. Sorry, they were—by the way, you can—they were not prepared; these are all questions that are unscripted.

Roshan: There’s a great group out there called Small Change, um—I forget the, and I’m definitely not an SEC attorney—but there’s a, there’s a, and everyone from RealtyMogul is laughing. Um, but there’s a group, there’s a recent, um, regulatory, um, uh, amendment that allows for non-accredited investors in, in crowdfunding.

CJ: Um, I think it’s, uh, it’s Reg CF.

Audience Member: Thank you.

CJ: It’s a one-year-old maximum $5 million investing Reg CF non-accredited through the SEC. I did say I play one on TV. There you go.

So, we have to have accredited investors in our format. But, um, what I found recently, which has been really powerful, um, we had a—I was interviewing a sponsor at a webinar and he was from Vietnam. And he told the story about how, um, he used, um, his company to build wealth within his community, you know, through a lot of—if you looked at the exhibit ads operating agreement, there were, you know, 50 people with Vietnamese names. And it’s really the power of the crowd to create access to, um, to new opportunities. You know, he’s limited to the people that he knows in his neighborhood, but if we can digitally market to the Vietnamese community all over the country, which we do, um, we look for those specific opportunities.

I had—I had four sponsors in a row that were all Indian. I said, “Well, wait a minute, we have to, you know,” and I interviewed them. I said, “Well, how do we access the accredited community in the Indian community?” And they gave us a bunch of different, um, you know, periodicals, and our marketing team, you know, directed the digital marketing to those avenues. It was really cool, and, um, it really opened up a whole level that I never thought could have existed before.

So, I’m going to take a moment because I just realized, in full disclosure, I should—I did not introduce myself because I wanted to put the focus on my panelists. I’m CJ Follini. I was the CIO and principal of a $1 billion multifamily office with nine families at its peak in 2018 that we converted into a private investment platform for the individual Main Street, not Wall Street. So, every Blackstone, Bentle, Nuveen strategy, both real estate and otherwise, credit, fine art, um, opco, consumer packaged goods—we offer to the non-accredited investor SEC approved. That’s why this is a personal passion. I was trying not to be—I was trying to focus on our panelists. So yes, this is a real passion of ours is to include everyone in these great strategies that these individuals and other sponsors are executing. And that’s our goal. And that’s why I’m—I think that’s why I’m here, right, Stephanie?

Stephanie: Yes, that’s why you’re here.

CJ: Okay, yes, that’s why I’m here.

Martin: Um, let me interrupt one second on the governance thing, and I think it’s, uh, you know, a broader different angle on governance, but I think I’m going to get on a soapbox for a second then get off. But, um, how many of you here are based in California? Most of the folks. And how many of you are based in LA? And how many took a helicopter to get here? Right, we all drove some way. I doubt we—anybody took public transportation. But you might have taken an Uber and you drove into the hotel and you drove underpasses where there are homeless people. You know, um, this has become, if not the number one, one of the two or three top issues facing not only Los Angeles but, candidly, all of California and, you know, every West Coast city and now Austin and a dozen other cities.

And I think the point you make about inclusive wealth creation and inclusion in the economy is one of the two largest issues facing the country and the world. There are two large issues, in my view. One of them is carbon emissions, greenhouse emissions, and, you know, getting the planet sustainable. And the other is whether the capitalistic system is going to work in the long term, which is, you know, most empires throughout history have failed because the rich have gotten too rich.

CJ: Okay, so now you got into a philosophical—I said we should not get philosophical, so now you got—

Martin: But so I think the point is, I think, you know, the issue of creating social impact on either of these dimensions is a fundamental issue that every investor, everybody in the continuum of real estate investing and other asset classes, whether you’re on the consulting or the environmental or the architectural side, um, you know, this is something that we should all be really dealing with. Because in the sixth largest economy in the world, people forget how large California is as an economy, the number one, number two, number three issues are homelessness, affordable housing, and crime.

CJ: So we should—Martin, I completely agree. So there really is no philosophical debate when you’re on the same side. I’ll say one comment that I—that in my agreement is that, you know, how you—you have people not disagree with each other and not create polarity in a country invest together. You won’t have disagreement if you’re both looking for the same goal. If more people invested together, we would have less people on opposite sides. That is how—that’s the future of capitalism, in a very arrogant statement I just made. But anyway, sorry about that.

CJ: Now back to our original program. Asset classes. Speaking of the granular, thank you Martin. By the way, what’s next? I’ll—let’s start at the far end. Where do you see the twin goals of financial return with all of the geopolitical risks, inflationary, all of this uncertain, high-volatility environment? Where do you see the twin goals of social impact and financial returns being best realized in the next asset class or where you want to head?

Matthew: Great question. I mean, I think the easiest place to find that intersection right now is in housing, um, and that’s a broad statement. But, um, you know, when you really look at it, you know, a person’s home determines so much of their outcome in life. Um, and being able to provide affordable housing that can provide, you know, all the necessities that someone needs, broadly speaking, I think, is the easiest way to check off both the social aspect of what we’re trying to achieve and generate returns, given what I believe to be a housing shortage broadly.

I think, getting more specific, you know, one place we’re looking at right now in investing is senior housing, um, and specifically maybe lower-income senior housing. There’s clearly an overlay of demographic waves that’s coming that way. Affordability is becoming a major issue, especially in the low-yield environments that we’ve been living in for so long.

And we’ve really been looking specifically, largely because of our ESG initiatives and the way we’ve started rethinking the way we invest as a result, is looking at how to bring health care and merge that with senior housing in a certain way to, um, really drive better health outcomes for our tenants. But also, quite frankly, it also, I think, creates a marketing piece for your own real estate and drives better occupancy, better awareness, and returns for investors as well.

CJ: How many people here would like to go to the ground floor and go to your primary care physician or urgent care facility, walking downstairs or taking the elevator, versus driving 30 minutes and waiting four hours? Anyone? Okay, I think there’s some buyers.

Matthew: Yeah, I mean, from a senior housing perspective, there’s a lot of studies out there that suggest the most important outcome for somebody’s health is not diet, it’s not exercise, it’s your living environment. Are you living alone? Are you having the proper support to get your medications properly into you every day, etc.? And it’s, um, it’s a, it’s a real national imperative, I think, as the demographics get older and that starts coming into light.

CJ: Thank you, Matthew. Uh, Stephanie’s flashing multiple minutes at us, so I’m going to go right down quickly.

Kate: Yeah, uh, I’m just going to return to your previous comment on just access to the capital that we’re all—that we at Nuveen are providing. So our average loan size has grown to $35 million, but we do still go down to $500,000. We did start with the Mom and Pops that were looking to upgrade their dilapidated buildings, um, and now we’re seeing multifamily projects that really need to upgrade those buildings. So I think access to capital is an important point, and probably you can include that in the governance.

CJ: Absolutely, under accessibility. Access to capital may be the most important.

Kate: Yeah, and in terms of asset classes that we’re seeing, um, we’re seeing a lot of multifamily, a lot of housing, senior living, um, but also hotel recaps. I think the hotel market is—yeah, the hotel market is coming back a little bit. We’re seeing some hotel recaps. Um, I think from a C-PACE perspective, we finance any asset class. So, you know, as long as you’re doing energy-efficient upgrades to a building, you know, we’re your lender.

CJ: Great, thank you. Uh, Roshan?

Roshan: I would, uh, agree with a lot of what Matthew said, which is housing and healthcare. Uh, housing in particular, uh, it’s one of the biggest problems in California, as Martin said. Uh, there’s not enough housing, so workforce, especially workforce affordable housing. So, uh, you’ve got to have new development of housing. So we’re looking at development, uh, we’re looking at modular building, a different type of construction type—anything to get it done quicker. But entitlements and the bureaucracy to get anything built in California is also—