Marcus Books, the nations oldest black owned bookstore located in San Francisco, is facing the possibility of displacement. Fundrise, a commercial real estate crowdfunding platform, is helping them raise $1 Million to buy back the property.
Fundrise is seeking accredited investors to save a property. The campaign has been created with the goal of raising $1 million, the remaining amount necessary to save this small business and two apartments located overhead.
The campaign allows accredited investors the opportunity to invest as little as $10,000, with an expected return of around 4%. The rate of return is below the normal market value, but it comes with the added knowledge that the investments will have a lasting social impact on the area.
Marcus Books, the oldest African-American family-owned bookstore in the nation, is facing the possibility of displacement. This bookstore has been in business since 1960. It is also situated in its current location of 1712 Fillmore Street, also known as the historic Jimbo’s Bop City building, since 1981.
The building hosts the bookstore on the street level and a pair of Victorian-era apartments upstairs. A recent bankruptcy of a majority shareholder caused the building to change ownership. However, the new owners are offering an opportunity for the San Francisco Community Land Trust to purchase the property back. Currently, the offer stands at the current market property value of $2,600,000. The bookstore and residents of the apartments are required to vacate the premises by 28 February 2014, if this amount is not raised by then. Currently, the campaign has raised $1,650,000 from Westside Community Services, a local non-profit organization, thus the need for $1 million.
The San Francisco Community Land Trust is an organization that acquires properties that are at risk of displacement and stabilizing them. The apartments at risk in this deal are slated to be maintained at rates affordable to families who make 80% of the median income. For a family of four, this comes out to $80,000 per year.
Vacancy rates for apartments in San Francisco are at their all-time lowest level. Data suggests this amount is anywhere from 2.8-4%. This results in expensive options, and apartments are often difficult to find. As of June 2013, the rental cost of a 2-bedroom apartment is more than $3,000 per month. All these signs suggest that San Francisco suffers from a significant lack of affordable options in terms of the housing market.
Recent data suggests that the property values for San Francisco have been rising since 2012. In fact, similar buildings within only a mile of the Jimbo’s Bop City building have been sold for amounts between $1,400,000 and $2,840,000. Sales have increased, on average, by 23% on 3-unit buildings. These rates are expected to rise even further in the future. In fact, comparative market analysis has recently validated the selling price for this piece of property.
For investors, this means only a moderate risk associated with this investment. Investors can feel confident in the current market trends, and should expect and see solid returns on their investments. In addition to these returns, the knowledge that they will be saving a culturally significant building for the community is satisfying.
The apartments located in Jimbo’s Bop City building are in the most expensive housing area in the country. It would be quite difficult for families to find affordable options. An investment in this property would go a long way in helping create a trend of affordable apartments.
Eighty two percent (82%) of the 33,000 people living in the commercial area are renters. The median income for these households is $54,000. Approximately 34% of the households earn less than $35,000 per year. Higher income families (those who earn between $100,000 to $150,000 per year) have been increasing. The result is a higher likelihood of lower-income families being forgotten. The Fillmore District has become a significant priority for these reasons.
Recent reports suggest that retail leases cost more in Fillmore area than the other commercial districts. Of course, this is a reflection on advantages of residing and conducting businesses in this District. The Fillmore District boasts of cultural and historical significance, is also centrally located, and has a population of young people with disposable incomes.
Marcus Books seeks to become a 501(c)(3) non-profit cultural institution. The bookstore itself is not in financial trouble. In fact, the store is healthy and stable. This suggests that your investment in this property has high-potential for return.
Investors are enjoined to assist in raising the $1 million needed, to complete the $2.6 million, before the bookstore and the apartments’ occupants are forced to evacuate the building. Investors, do visit Fundrise to read more about the campaign and participate in saving a historic building, the Marcus Books and the residents as well.
“The investment will stabilize a property whose main tenant is the historic Marcus Books, the oldest African-American owned bookstore in the nation. Additionally, it will provide two affordable housing units in the heated SF housing market. The investment return is below market, but the deal provides high social impact.”
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