News

Introducing Nico — The Neighborhood Investment Company

Author: Nico
Date: December 6, 2019
Echo Park

We love neighborhoods and believe that inclusive and stable neighborhoods are cornerstones of a healthy society. We also believe that the way local real estate is owned (who owns it, and what they are motivated by) matters.

Today, we are pleased to announce the launch of Nico, the neighborhood investment company. Nico is a new type of neighborhood investment company that makes it possible for people who love their neighborhood to build a long-term financial stake in their community by investing in local real estate.

We’re launching Nico in Echo Park, a vibrant, socioeconomically diverse, and beloved neighborhood centrally located within the City of Los Angeles where the vast majority of local residents are renters and are therefore often excluded from being financial stakeholders in their neighborhood.

Nico is built around a new model for community-driven, local investment that radically lowers the barrier to entry for owning an interest in local property. By making local investment more accessible, we seek to create a new path forward for neighborhoods where investment capital is aligned with local stakeholders to steward and contribute to the stability of the neighborhoods where we operate.

Here’s more on why we started Nico and how it works.

Housing is broken and neighborhoods are essential

The current housing system was not designed for today’s world. The gap between traditional homeownership and renting is too large — it’s an “all or nothing” choice that in today’s economy excludes more and more people from being financial stakeholders in their neighborhood.

Neighborhoods are more than the backdrop for our lives. They’re the foundation of our communities and building blocks of society. Extraordinary value is embedded in real estate within the neighborhoods we inhabit. And while everyone who lives or works in a neighborhood contributes to creating that value, not everyone benefits from participating in the financial value that is created.

With Nico, we’re proposing a new path forward for people who love their neighborhoods that combines some of the key benefits of traditional homeownership like wealth creation and having a financial interest in your community’s prosperity, but is flexible, incremental, and designed for the realities of today’s world where traditional homeownership is increasingly out of reach or not desired.

Nico Echo Park — increasing access to neighborhood equity

Nico’s mission is to localize how wealth is created and broaden access to neighborhood equity. Initially, we’ll do that with the launch of Nico Echo Park — the world’s first Neighborhood REIT. A real estate investment trust (REIT) is a type of company that owns a portfolio of income-producing properties in which people can invest as shareholders. Nico Echo Park is a Neighborhood REIT that owns properties located in and around the Echo Park neighborhood of Los Angeles.

When we launch Nico Echo Park early next year, we’ll be able to offer shares in that portfolio of local properties starting at $100. Purchasing shares of this Neighborhood REIT means you own both a share of the income produced by the real estate and a share of its underlying value. As the properties increase in value, so does the value of your investment. Through our website, investors will be able to make one-time investments or recurring monthly investments, building equity over time.

Echo Park is home to about 45,000 people. For the vast majority of them, owning property in their neighborhood is out of reach. By lowering the barrier to owning shares of local real estate so significantly, Nico represents an opportunity for many more people to build financial wealth by investing in their own neighborhood.

Nico Echo Park is a public benefit corporation and certified B corp

When it launches early next year, Nico Echo Park will own three rent-stabilized, multi-family apartment buildings. These buildings comprise 80 residential apartments and four commercial properties housing local businesses. While these properties share the fundamentals of strong long-term financial investments, they represent much more than that. These are homes. They support families. They have histories. And they’re an important part of Echo Park itself. By investing in rent-stabilized buildings that have been part of the neighborhood for a long time and by viewing them both as long-term investments and homes for the residents of those buildings, Nico seeks to help preserve and strengthen the physical and social fabric of the neighborhood.

Nico Echo Park’s responsibility as a long-term steward of these properties is a privilege. To make sure we fulfill that responsibility we’ve organized Nico Echo Park as a public benefit corporation and certified B corporation. Unlike most companies which are required only to maximize shareholder value, public benefit corporations balance financial returns to shareholders with the pursuit of positive social and environmental outcomes to a broader set of stakeholders.

We will count on our local stakeholders (including the residents of our properties, local shareholders, and other neighborhood stakeholders) to help inform and measure the non-financial objectives of Nico Echo Park through surveys, feedback sessions, and other on-going community engagement methods which will be a pillar of our business model over time.

Initially, Nico Echo Park will prioritize five interdependent areas of social and environmental impact to prioritize and measure:

  • Increased financial inclusion and wealth creation;
  • Distributed power and stakeholder alignment;
  • Improved environment and quality of life;
  • Foster neighborhood diversity and stability;
  • A strengthened local economy.

Alongside our financial reports outlining the performance of these properties as investments, each year we’ll release our Nico Echo Park Impact Report, summarizing our progress and challenges in meeting these additional objectives. In the meantime, you can learn more about Nico’s Impact Assessment Framework on our website.

We’re in it for the long-term

Typically, real estate investors approach investments as short or mid-term endeavors. The playbook is simple: buy a property low. Make some improvements. Then sell high a few years later. This short-term, profit-driven cycle meets the needs of investors but doesn’t typically take into account the impact of that model on the local community.

Nico breaks from that cycle. When you invest in Nico Echo Park, you’re investing in a company that is committed to a very long-term investment horizon. This is not a “get rich quick” kind of investment. And we don’t think Nico Echo Park is the right investment if you’re looking to make a quick return. This is a long-term investment in Echo Park and a new model for community investment that enables many more people to in the financial value created within the neighborhood.

Join us!

We started Nico to create a new path forward for neighborhoods, where:

  1. Investment is aligned with local stakeholders to stabilize and steward neighborhood real estate;
  2. Where success is defined in terms of positive financial, social, and environmental outcomes;
  3. Where many more people can have a long-term financial interest in their neighborhood.

In addition to believing in Echo Park as a long-term investment, we chose to launch Nico in Echo Park because of this neighborhood’s diversity, culture, and history of leadership around new ideas. Local stakeholders in Echo Park can help lead the way in defining what this new type of neighborhood investment means over time.

To make this new model work, we are asking for your support and help in getting the word out. Please sign up here and we will keep you posted as we progress towards the launch of Nico Echo Park.

Later this year we will invite the public to participate in surveys, information sessions, and co-creation events that will help to inform the social and environmental priorities for Nico Echo Park during our first year of operations and contribute to a broader understanding of what’s important to you in your neighborhood (even if you are not local to Echo Park).

We are excited to start this journey with you and to see what we can build, together.

Warm regards,

Max Levine, Co-founder & CEO | John Chaffetz, Co-founder & President

Disclaimer:

Nico Echo Park may undertake a public offering, pursuant to Regulation A under the Securities Act of 1933, as amended.

(1) no money or other consideration is being solicited, and if sent in response, will not be accepted;

(2) no offer to buy the securities can be accepted and no part of the purchase price can be received until the offering statement is qualified, and any such offer may be withdrawn or revoked, without obligation or commitment of any kind, at any time before notice of its acceptance given after the qualification date;

(3) a person’s indication of interest involves no obligation or commitment of any kind;

(4) once the Preliminary Offering Circular is publicly filed with the Securities and Exchange Commission, you may obtain a copy of the most recent version of the Preliminary Offering Circular by contacting investors@mynico.com, calling (855) 300–6426, or visiting www.mynico.com/offering

Indications of interest. Any written communication as per above may include a means by which a person may indicate to the issuer that such person is interested in a potential offering. The issuer may require the name, address, telephone number, and/or e-mail address in any response form.