The mission of the Strategic Investment Fund (“SIF” or the “Fund”) is to fill gaps in the financing of real estate development projects that align with regional economic and community development goals. Previously, SIF had been focused on two strategies:
REGIONAL CORE INVESTMENT STRATEGY – Provide gap financing that facilitates the development of retail, housing, hotel, office and urban entertainment projects that serve to preserve and strengthen Downtown Pittsburgh and its surrounding neighborhoods.
INDUSTRIAL SITE REUSE AND TECHNOLOGY DEVELOPMENT INVESTMENT STRATEGY – Provide gap financing that enables technology incubator, multi-occupancy industrial, business park and brownfield redevelopment projects that promote business retention, expansion and relocation opportunities. Consideration is given to those projects that employ green building practices.
In July 2018, the Board of Directors adopted guiding principles regarding the Fund’s investments during its remaining term, recognizing the progress that has been accomplished in Downtown Pittsburgh while focusing on the need to further focus investment into areas that still require revitalization. In particular:
- Project Types: Affordable housing projects are recognized as critical to the success of our region and will be an important focus of the Fund’s activities, but affordable housing will not be the sole focus for the Fund’s investments. The Fund will also focus on commercial real estate development projects that enhance the overall environment of the neighborhood, particularly projects that are viewed as catalytic and support the mission goals of the Fund.
- Geographic Focus: The Fund will continue to emphasize projects in the City of Pittsburgh and Allegheny County, consistent with its long-standing regional core strategy. Attention will be focused on communities that have been designated as Opportunity Zones and/or have been prioritized by the Allegheny Conference as requiring attention from resources such as the Fund, where other groups are active in supporting revitalization and development efforts, and where the community is supportive of such efforts. These communities will include, but are not strictly limited to, the Hill District, Hazelwood, Homewood, the North Side, Wilkinsburg, McKees Rocks, and the Hilltop (neighborhoods within the Allegheny Conference’s Strengthening Communities Partnership program that are also in Allegheny County).
- Risk Tolerance: The Fund is willing to accept higher risk than has been the case in recent years, with potentially longer return horizons and lower expected returns, but in a manner consistent with its governing instruments, including that projects must present a reasonable expectation of return of capital.
General Investment Guidelines
- Projects that do not qualify for sufficient public and/or conventional financing on terms which will allow those projects to proceed.
- Projects located in blighted areas and which provide employment or housing opportunities for disadvantaged persons.
- Projects that encourage business attraction, retention, expansion and creation, and brownfield redevelopment and green development projects, including speculative building and site development projects.
- Investment types include mortgages, mezzanine or bridge loans, passive equity and other project-related investments. Subordinated security interests with financial recourse are permitted.
- Typically, the maximum investment term is targeted to correspond to the period leading to stabilization of project operations (while accommodating longer and customary periods of amortization), although the Fund is currently scheduled to not enter into new investments after May 31, 2022 for exit not later than May 31, 2032.
- The amount of the Fund’s financial participation normally falls between $1,000,000 and $5,000,000.
- Projects that offer an appropriate risk-adjusted return and ensure preservation of the Fund’s capital.
Project Investment Guidelines
Each request received by the Fund is evaluated considering the following characteristics:
Projects that advance one or more of the Program Interests.
Commercial and industrial projects located within the 10 counties that comprise the Southwestern Pennsylvania region.
Retail, housing, hotel, office and urban entertainment projects that contribute to the revitalization of Downtown Pittsburgh and its surrounding neighborhoods.
Projects located in blighted areas and which provide employment or housing opportunities for disadvantaged persons.
Get in Touch
Contact the Fund’s manager Callay Capital LLC:
To discuss detailed business plans early in the financing process to facilitate realistic expectations regarding the likelihood of Fund participation and the terms thereof