Some traditional credit requirements disproportionately challenge black entrepreneurs, two company executives told attendees at a virtual event recently held by the Urban Land Institute.
The predominantly white universe of real estate investors may be used to working with people and companies who have sufficient financial resources to have a track record in business, but historical inequalities have limited those opportunities for black entrepreneurs, noted Don Peebles, founder and chairman by The Peebles Corp., a privately held national real estate investment and development company.
Don Peebles is the founder and chairman of Peebles Corp.
"It's harder to have a track record when, well into the 1960s, many jurisdictions … had agreements where we couldn't even own property in certain areas," he said.
Buwa Binite, general manager of affordable housing company Dantes Partners, noted that he initially faced hurdles in building a track record and meeting lending requirements.
"One of the first deals I did in DC was with a tenants 'organization and I was very fortunate that the tenants' organization had 50% equity on the table so we could prove to the bank that the leverage was only 50%. "Said Binite." Without this transaction, I'm not sure we'd have a track record today. "
Binite said his difficulties getting into the business forced him to make sure his company could be passed on to the next generation. He was looking for investors willing to take this into account. However, traditional arrangements with institutional investors tend not to do this, he said. Family offices were more accommodating.
"We found that they are very entrepreneurial. We found that they are very sensitive," Binite said.