IMPACTASSETS 50™
An Annual Showcase of Impact Investment Fund Managers
ImpactAssets 50
An Annual Showcase of Impact Investment Fund Managers
Blackstar Stability Investment
Manager LLC
Affordable Housing & Community Development
Demographic-based impact
Racial equity and justiceFirm Overview
Blackstar is a minority-owned and led real estate investment firm, focused on high-impact single-family housing strategies, based in Washington, DC. The principals’ experience over the past three decades includes deep institutional investment, public policymaking and innovative finance leadership. Restructuring and revitalizing distressed debt products in order to stabilize families impacted by adverse market conditions or individual hardship represents the expertise of the Firm's management team. Blackstar has crafted, tested and proven a double-bottom line investment approach that delivers strong returns and supports homeownership in low-income communities.
Years of Operation: Less than 3 years
% of Capital from Top 3 Investors: 50% – 99%
Socially responsible investing to expand equitable ownership of affordable single-family homes, by attacking predatory lending practices.
Blackstar is focused on providing affordable homeownership to low- and moderate-income families by restructuring distressed mortgages and alternative seller-financed debt instruments. The goal is to help stabilize families and neighborhoods by preserving affordable single-family housing, enhancing equitable ownership, and attacking predatory lending practices. Thousands of families will enjoy benefits from the transfer of home equity to monthly payment reduction and mortgage principal reduction. Blackstar will provide investors compelling risk-adjusted returns, while consistently delivering meaningful impact to underserved families and communities.
Blackstar's leadership team represents a compelling blend of significant institutional investment, housing policymaking, and grass roots entrepreneurial experience crafting and executing innovative solutions to affordable housing challenges. The principals have created and managed uniquely successful impact strategies addressing housing affordability. Notably, the principals designed and administered the nation's only profitable foreclosure prevention program using Hardest Hit Funds from the federal Troubled Asset Relief Program (TARP) following the GFC. This success became the basis for the increasingly efficient and scalable solutions that have led to Blackstar Stability's execution strategy.
Investment Example
Blackstar's current portfolio consists of 181 single-family properties across 18 states. The impact and return projections remain strong, targeting a net 11-13% IRR. The impact highlight includes: * Payment Reductions - 40% average reduction in monthly principal and interest payments * Equity Transfers - Average equity of $40k transferred to families; a more than 10x increase in their net worth * Principal Reductions - 20% average reduction of principal balance for underwater borrowers * Penalty and Arrearage Forgiveness - $5k average forgiveness
Leadership and Team
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John Green – Managing Principal More Info
A co-founding principal of Blackstar Real Estate Partners, John Green directs firm-wide strategic planning, and leads the investment management efforts. John has over 18 years of real estate and finance experience, and has managed approximately $5 billion in commercial, multifamily residential and mixed-use properties in greater Washington, D.C.; New York City; Baltimore; San Francisco; and other major metropolitan areas within the United States. For the decade prior to founding Blackstar, he served as Managing Director for MacFarlane Partners, a San Francisco based real estate private equity firm. In that role, John led all investment and asset management activities in the East Coast markets, which included acquisitions, dispositions, and financing of property investments. |
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Erik Sten – Chief Investment Officer More Info
Erik was a four-term, elected City Commissioner, in Portland, OR from 1996 to 2008. In this role, he served as both policy maker and manager with executive authority over city Departments including the city’s Bureaus of Housing and Community Development, Environmental Services, Fire and Rescue, Water, Emergency Management, Energy and Cable and Franchise Management. As Housing Commissioner, he led and implemented one of the nation’s most comprehensive affordable housing agendas, which included strategies on chronic homelessness, income integration, workforce housing, homeownership for underserved communities, transit-oriented development, green building, sustainability, housing first, service enriched housing, the schools/housing connection and veterans’ housing. |
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George Scott – Principal Capital Markets/Investor Relations More Info
George Scott is a Principal at Blackstar focused on overseeing capital markets activities with respect to investor relations, equity sourcing, debt strategy and joint venture structuring. George has over 25 years of real estate and finance experience, raising and allocating more than $3 billion on behalf of institutional investors globally. Prior to joining Blackstar, George was a Senior Real Estate Investment Officer at New York Common Retirement Fund where he was primarily responsible for sourcing, structuring, negotiating and monitoring equity investments with both domestic and global fund managers, joint venture partners, operators and sponsors across various property types. |
Financial Performance
Impact Performance
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Percentage of Total Assets Under
Management that are Impact Investments: |
100%
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The success of Blackstar's investment strategy which has the dual purpose of doing well and doing good requires the management team to be keenly focused on making sure Blackstar is strategically aligned with all potential stakeholders who understand the overall mission and objective of helping low-and middle- income families achieve equitable homeownership. The targeted investor base, third party vendors and debt providers all have similar interest in achieving the social impact mission relating to affordable housing. Blackstar's strategy is based on transparency, communication and a consumer-oriented business model that proactively rights the wrongs of the contract for deed model that has historically benefited investors and not consumers. Given Blackstar's approach, it is expected that regulators will welcome Blackstar's involvement and there are ongoing discussions with some of these regulators to explore purchase opportunities in which a sale to Blackstar could be part of a proactive settlement.
Blackstar's business model is one that is focused on acquiring predatory debt products like contracts for deed ("CFDs") from originators/holders who have operated with a more predatory investment approach in assisting low-and middle-income families in achieving homeownership. The CFD market tends to stand apart from the more transparent and documented mortgage market as it lacks securitization, the GSEs, CRA and other market drivers. There is not an abundance of investors in acquiring CFDs like Blackstar due to the headline, legal and regulatory risk. The social impact investment approach Blackstar is bringing to market will help to distinguish Blackstar's efforts in addressing economic inequality relating to affordable homeownership for the most vulnerable population.
Impact Tracking and Monitoring
Learn More
1250 Connecticut Ave, Suite 700, Washington, DC 20036, USA
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