In the heart of Historic Anacostia in the nation’s capital, building crews have been hard at work transforming a construction site into MLK Gateway II, a five-story office and retail building with two levels of underground parking. The $62 million project, phase two of a larger development, trumpets the re-emergence of the vibrant neighborhood.
This is the first venture outside the Philadelphia headquarters of SHIFT Capital, which is co-developing the project under its innovative NextGen Impact Platform that sees it partner with local impact developers who are making community-oriented investments in their neighborhoods.
MLK Gateway II, which broke ground in August 2021, is a partnership between SHIFT and The Menkiti Group, a D.C.-based Black-owned integrated real estate services company. Under the NextGen Impact Platform, SHIFT contributed its development expertise and helped The Menkiti Group raise value-aligned equity, debt, and tax credits for the project.
“The Menkiti Group is a first-class operation that we are proud to be partnering with.” Brian Murray, CEO of SHIFT, shares. “Their orientation towards a neighborhood approach sets them apart from others in the space. Their team balances the practical expertise required to execute these difficult projects with the compassion and thoughtfulness to recognize the people their projects impact.”
MLK Gateway II totals 104,000 square feet and is situated at the corner of Good Hope Road and Martin Luther King Jr. Avenue SE, directly across the street from the completed first phase of the project. Set to be completed in 2023, MLK Gateway II’s office spaces are 90% leased by the D.C. Department of Housing and Community Development, which is relocating its headquarters to the site. The team is looking to fill out the retail and office vacancy with mission-driven and community-facing tenants that will add to the tapestry of Anacostia.
The project aims to serve as a gateway from D.C.’s downtown to Anacostia and to revitalize the neighborhood, a historic community that has seen relatively low economic opportunities and value-aligned investment.
“Our partnership with SHIFT has been very productive in that we have a shared goal of making an impact in the communities we serve and that keeps us highly aligned and highly motivated,” said Bo Menkiti, Founder and CEO of The Menkiti Group. “SHIFT has brought real competencies to the community development finance realm by bringing capital and different financing sources to the deal.”
Through the NextGen platform, SHIFT seeks to partner with real estate developers, like The Menkiti Group, who share its mission to use real estate to invest in underserved neighborhoods and to catalyze inclusive, equitable communities. The platform aspires to connect developers with pre-development equity financing for projects, deal-level equity, bridge funding for operations, execution support and programming, and proprietary impact metrics.
“As a real estate professional, I know firsthand the challenges of getting into this space,” said Brian Murray, partner and CEO at SHIFT. “If you were not born into a family that invested in real estate or have intergenerational wealth, the barriers can be quite high. With that in mind, we created the NextGen Impact Platform to partner with companies who will lead the real estate space forward in favor of stronger, neighborhood-oriented equitable outcomes.”
Most recently, SHIFT partnered with the Hanini Group, a Newark, New Jersey-based real estate development firm, on the $80 million acquisition and purchase of three Newark buildings in the city’s Central Business District. The deal, with a total capitalization of $140 million, also has Piyush Bhardwaj of CoInvestment Partners as a co-partner. More on the Newark NJ project can be read here.
Other community-focused NextGen Impact Platform projects include Sharswood Ridge with Mosaic Development Partners and J-centrel with Smith & Roller, both Philadelphia-based and minority-owned development firms. SHIFT is working to expand its NextGen platform and pipeline with additional partners and projects in the Mid-Atlantic, Midwest, and West Coast regions.
“We want to showcase local developers that are doing it right,” Murray said. “They know their neighborhoods and they have developed the reputation and the relationships that are critical for the type of work we all want to do – creating equitable and vibrant communities that bring real positive impact to the people that live there.”