JBG Smith Launches Investment Management Platform for Affordable Housing

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Bethesda, Md.-based JBG Smith is affording affordable housing its due attention.

The REIT has consolidated its workforce housing initiatives into Leo Impact Capital, a new platform dedicated to acquiring, operating and preserving middle-income housing, the REIT announced Wednesday. 

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As a workforce housing investment management platform, Leo will take over JBG Smith’s previously established investment activities, and therefore manage the Washington Housing Initiative Impact Pool, which finances multifamily affordable housing developments and acquisitions. Valued at roughly $115 million, the Impact Pool has created and preserved some 3,000 units in the D.C. area since its launch in 2018.

“Our primary objective in creating Leo Impact Capital is to build on the successful track record of the Impact Pool and unlock access to opportunity for our investors, residents and communities by helping people live in neighborhoods that set them up for success at rents they can afford,” AJ Jackson, Leo’s newly minted president and JBG Smith’s former executive vice president of social impact investing, said in a statement.

Affordable housing has been in the spotlight across major markets, as rents rise in D.C. and beyond. Leo is homing in on the “missing middle” — a subject of housing attention in Arlington, Va. — to provide affordable housing to workers who don’t earn enough income for average market rents but earn too much to qualify for housing subsidies. As for the geographics, Leo will therefore focus on growing D.C.-area neighborhoods that are most susceptible to increasing costs. 

“Leo Impact Capital offers residents and our investment partners the best of both worlds,” Matt Kelly, JBG Smith’s CEO, said in a statement. “Leo will benefit from a team of dedicated and experienced professionals focused on investing in and operating affordable workforce housing while generating fee income for JBG Smith and strengthening its relationships in local communities.”

JBG Smith currently operates throughout the Washington, D.C., area. Earlier this month, the REIT announced steps to close three office properties in Northern Virginia’s National Landing, the site of Amazon (AMZN)’s second headquarters. The National Landing submarket comprises roughly 75 percent of the company’s total holdings. 

Anna Staropoli can be reached at astaropoli@commercialobserver.com