While diversity and inclusion mission-driven organizations champion particular populations, Rainbow Capital Partners managing partner Ryo Ishida believes they all work toward a common purpose. "When you highlight the importance of diversity and inclusion, it ultimately empowers all groups," he said. "Groups fighting for diversity may have different goals but ultimately have one unifying factor: equal opportunity for all." Both Rainbow Capital and Chicago TREND are bringing that ethos to the retail real estate space. 

Chicago TREND

Lyneir Richardson wants to empower Black communities economically by helping residents experience the wealth-building potential of shopping center ownership. That's why the developer formed Chicago TREND in 2016. It acquires small, service-oriented shopping centers throughout the country in partnership with Black investors from those communities. "In my view, wealth is created by owning assets that generate revenue and appreciate over time," he said. "If we want to truly address racial wealth-gap issues, we need to be helping more people of color own commercial property, specifically shopping centers."

Chicago TREND lends Richardson’s own experience and relationships with architects, leasing professionals and others in the shopping center industry. His experience ranges from residential development to shopping centers. As a former vice president of urban development at General Growth Properties, for example, he led the redevelopment of Baltimore’s Mondawmin Mall. "This is a business proposition," Richardson said, explaining Chicago TREND's role in acquisitions. "We're in partnership [with community investors]. We're putting up money, providing the expertise and will ultimately co-own the asset with local entrepreneurs and community residents."

Chicago TREND's first acquisition was Butterfield Plaza, a 20,000-square-foot, inline shopping center in Olympia Fields, south of Chicago. Built in 1997, the center hosts tenants like Dunkin, Jenny Craig and a new, 100-seat restaurant called Batter & Berries, the third in the chain.

Chicago TREND's latest acquisition is a 9,755-square-foot shopping center at 8301 S. Holland Road in Chicago. Developed in 2008, the one-acre project is an outparcel of Chatham Market, a retail complex anchored by Walmart and Lowe's. After closing on the acquisition this fall, the new owners signed a letter of intent with a Black business owner to open a UPS Store in the final, fourth space.

And Chicago TREND is under contract to acquire another shopping center in Baltimore and one in Chicago. Though it is early days, Richardson's vision is to grow the portfolio to 100 retail properties, all owned in partnership with Black investors. "We want to be the first shopping center REIT owned by African Americans," he said. "There is a lot of work ahead of us."

The organization also works as much as possible with Black-owned companies, from tenants to service providers like leasing and groundskeeping. Over time, Richardson believes the influence of local ownership by people of color will continue to benefit area residents by creating business opportunities.

"Diversity is going to happen with intentionality," he said. "This is a direct effort to deal with systemic issues that have been a part of our larger American society and a part of our shopping center industry."

Rainbow Capital Partners

Rainbow Capital Partners’ mission: To drive social change through LGBTQ representation and inclusion in real estate. "Rainbow Capital Partners typically backs projects and companies with LGBTQ founders or senior leaders," said Ishida. It uses a syndication model, pooling the contributions of about 500 members for investment in commercial real estate companies and projects. It seeks a healthy return for those investors and provides access into commercial real estate projects for which minimums are typically much higher.

If a project or company doesn't have LGBTQ leadership, “we work with them to get the conversation started to set diversity and inclusion goals, even beyond the LGBTQ community," Ishida said. Rainbow Capital is working with retail landlords to fund investment in small business retailers, especially those with owners from the LGBTQ, women and minority communities. It’s also working with cloud kitchen operators to revitalize dilapidated retail spaces. One of its largest current projects is an allocation of $100 million for SFR3, which uses technology and scale to efficiently buy, renovate and lease single-family homes at affordable rates in the Southeast and Midwest. "The goal is to not only have LGBTQ representation in the fundraise but also to start the conversation for SFR3's long-term diversity goals," Ishida said, adding that the company's path to a more diverse work culture is starting from a firm foundation. "Forty percent of SFR3’s contractors and service providers are women, which is unheard of in the construction industry." 

After more than a decade of promoting diversity real estate finance, Ishida reports marked progress in the past two years, including greater openness to LGBTQ-inclusive policies. "More and more firms care about diversity, not only in [their] workforce but also in the capital behind their projects and companies," he said. "For us, it's all about continuing the conversation that our predecessors started. We believe more people should have a seat at the table and have an ownership stake in the future."

Ishida said, "We're starting the conversation with LGBTQ representation, but ultimately we recognize our fight and our responsibility is much larger than that."