Family office seeks social impact in Las Vegas developments

A San Francisco family office that invests on principles first and profit second has entered a joint equity partnership in a social impact property development in Las Vegas, as construction picks up in the US gambling and resort city.

The anonymous family office, which manages $200 million (€145 million) for several families, has entered the agreement with Cambridge Companies – a Las Vegas-based developer, specialising in land use and zoning enhancements, as well as residential and commercial developments.

Following boom years in 2005 and 2006, South Nevada’s construction industry was devastated by the recession, but started to make a turnaround last year with dormant developments being resurrected and new projects breaking ground.

The city’s population is also growing, with nearly 100,000 new residents over the past two years, according to a report released in March by local research firm Applied Analysis. Construction related jobs were the fastest growing segment of the population.

Cambridge Companies chief operating officer Filipp Chebotarev says many of the properties they acquire have low density residential or commercial zoning, but increasing the permitted density allows for more environmentally-friendly building practices.

Chebotarev says Cambridge Companies’ family office clients typically invest in deals between $3 to 5 million and range from social impact to purely profit-driven investors. They also partner with institutional capital for deals that are more than $20 million.

“When buying distressed assets at the bottom of a raising market the profit side will come, usually without worry, but it is easy to lose track of purpose,” Chebotarev says.

He adds: “Sometimes social impact can be a quantitative measure such as gallons of water saved, or energy reduction, but it is also measured by the feedback we receive from our community.”