The Rainin Arts
Real Estate Strategy

Private Foundations

May provide the capital (in the form of a grant or program related investment) for the pool of funds to address the issue of facilities.

Banks

Using the equity provided by the foundation, a bank offers a line of credit to make more liquid capital available on a timely basis, which is required for the purchase of real estate.

THE CDFI

Federal New Market Tax Credit

An incentive for corporations to access a tax break by collateralizing community loans, making new dollars available.

The Community Development Financial Institution (CDFI) uses the bank capital to establish an initial pool of funds for the property purchase and increases it through aggregating other funding streams. The CDFI also structures both the sources and uses of funds, including the Foundation grant dollars, additional funds borrowed from the bank, and equity loaned through the Federal New Market Tax Credits Program, or other sources. The CDFI may work jointly with the real estate holding company or another entity to provide real estate expertise to identify appropriate properties.

The Lender

Real Estate Holding Company

A stand-alone entity that ensures participants focus on shared goals. Working with a CDFI,
the holding company purchases real estate on behalf of organizations. They also help nonprofits with facility purchase decisions, assist with financial planning and conduct organizational due diligence. They may maintain the pipeline of nonprofits with facility needs (this work may be shared with a CDFI or other entity).

The property is purchased by the real estate holding company, who in turn offers a below market rate lease with option to buy to the arts organization.

The Lender

Real Estate Holding Company

In partnership with the local CDFI, the holding company purchases real estate on behalf of several organizations. They also help organizations  make the decision to purchase a facility, assist with financial planning and conduct organizational due diligence. In many cases, they maintain the pipeline of non-profits that need help with facilities (this work may be shared with the CDFI or another entity).

The property is purchased by the real estate holding company, who in turn leases-to-purchase to the arts organization.

City Government

Plays various possible roles, including providing zoning designation, intervening in public policy to encourage access, or identifying certain properties or neighborhoods.

More The city can bolster the case for mitigating displacement, provide seed funding for nonprofits to remain in communities, and contribute to the conversation on maintaining diverse neighborhoods, among many other roles.

Arts Organization

Through the innovative below-market rate lease with option to buy model, arts organizations can now count on stability in both the short and long-terms.

Other Funders

As the need arises for an expanded pool of capital, other foundations, corporate, or government funders can contribute.

More They can also bolster the process through supporting an individual organization's capital campaign or operating costs. As the capital pool is developed, various financial instruments are employed, including foundation program related investments funds.

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Arts Organization

Through the innovative lease-to-purchase model, arts organizations can now count on permanency in both the short and long-terms. 

Other Sources of Funding

City Government

Plays various possible roles, including providing zoning designation, intervening in public policy to encourage access, or identifying certain properties or neighborhoods.

More The city can bolster the case for mitigating displacement, provide seed funding for nonprofits to remain in communities, contribute to the conversation on maintaining diverse neighborhoods, among many other roles.

Other Funders

As the need arises for an expanded pool of capital, other foundations, corporate or government funders can contribute.

More They can also bolster the process through supporting individual organizations’ capital campaigns or operating costs. As the capital pool is developed, various financial instruments are employed including foundation Program Related Investments (PRI) funds.

Get the Infographic

Download

How It Works

See how an arts organization can take advantage of the Rainin Arts Real Estate Strategy

See the Path

Why It Works

“CAST freezes the cost of real estate when it purchases property, carving out an alternative market for nonprofit arts and culture organizations. When a cultural organization buys a property seven to ten years after it’s purchased by CAST, it pays the original purchase price. In a market that has seen commercial property values increasing at a rate of 15%/year, that’s a game changer for our most valued cultural assets.”
– Shelley Trott, Director of Arts Strategy and Ventures, Kenneth Rainin Foundation.

Leverages new sources of capital

Builds organizational and financial capacity

Contributes to economically diverse neighborhoods

Offers investors a way to maximize and recycle their funding

Mitigates displacement and creates places for artistic expression

Supports neighborhood revitalization efforts

Establishes a renewable pool of real estate financing dollars

Directly addresses issues of equity

Fosters effective public-private partnerships

Why Cities Need This

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