Is it possible to build wealth while keeping one’s moral compass pointed in the right direction?
At Praxis Capital we certainly hope so, otherwise we wouldn’t be in business. Doing well and doing good need not be mutually exclusive. Recognizing that has become part of how prosperous businesses conduct their operations, leaving their purely mercenary competitors way behind.
Profit For Everyone
It wasn’t that long ago that businesses rejected on principle the idea of maybe increasing expenses a little in order to create harmony and facilitate long-term growth. Offer employees discounted health coverage? Spend money to sponsor a neighborhood softball team? Not pour toxic waste into the water supply? Whatever for?
Fortunately, times and attitudes have changed, and not a moment too soon. In an ever more interconnected world, where friendships and professional relationships are now created across the nation or around the world as a matter of course, victory goes to the company that best understands how its behavior can affect everyone around it.
In Praxis Capital’s case, this goes well beyond the basics of the core business, which is taking multifamily residential buildings, making them better, and thus giving thousands of people a more desirable place to call home. That’s a worthwhile goal in and of itself, but – to recite the fundamental question that all businesses, successful or otherwise, should be asking themselves – can we do better? We can, and we have. And we continue to do so, knowing that setting an example in our properties makes for a richer community, and ultimately a richer world.
The Cure For Short-Term Thinking
Ideally, tenants ought to have a vested and long-term interest in the places where they live. Sure, most everyone is going to be a transient at one point or another in their lives, but truly being part of a community means feeling that you belong and that you’re doing your part, however large or small, to maintain that community and help it prosper. And that goes far beyond the confines of the multifamily property itself.
As one of the companies facilitating the communities in which our residents live, it’s incumbent upon us to do our part, beyond the primary tasks of cleaning the gutters and collecting the rent checks. It even includes activities that are outside the standard purview of a real estate private equity investment firm. Such as working with local non-profit groups; and thereby spending time and money on such activities as counseling tenants with below-average credit, which helps them to get back on their financial feet, and thus enables them to feel more secure throughout the terms of their leases and not have to worry about finding another place to live.
Another way to flex our social conscience in the process of performing our core business is by working with non-profits to help tutor residents’ kids. Not only because education is good in and of itself, but because kids who are caught up academically are more likely to stay out of trouble, and grow into functioning and responsible members of their own communities.
In the position Praxis Capital is fortunate enough to find itself in, we can also help with our residents’ physical sides. Through exercise programs, for instance, which benefit residents beyond the obvious physical improvements. Fitness classes help create friendships and camaraderie, adding to the sense of community that’s so important to the long-term success of a multifamily property. There’s a reason why they’re called apartment “communities”, after all.
Our town, our state, our planet
The social aspect is just one important facet of impact investing in multifamily real estate. There’s also a huge ecological component. With enough repetition and practice, the environmental improvements we make along the way, however incremental, can become habits before long and can eventually even be taken for granted.
Not much more than a generation ago, recycling bins were seen as quirky, and perhaps even unnecessary. After all, from the user’s perspective they weren’t fundamentally different than the trash cans we’d been using since the advent of civic sanitation. Today, of course, tossing one’s aluminum cans in the appropriate box and saving the paper refuse for the next box over is rarely given a second thought.
Room For Everyone
Don’t think of this values-driven investment as some sort of top-down directive, created by management after a long brainstorming session and foisted upon employees without their input. Active participation from property managers is a critical part of developing our company’s social conscience. Each manager selects a local charity to support, and encourages the community’s tenants to do the same.
Call it “socially responsible” if you like, but understand that none of this is undertaken solely with the intention of fitting Praxis Capital for a halo. Rather, it’s done with the most selfish of goals in mind: improving the bottom line.
The fact is that engaging the community, helping employees and residents to reach their full potential, creating a sense of fraternity, are all just plain good business. Social responsibility gives tenants incentive to renew their leases, makes management’s job easier (because the managers can now spend less time trying to fill vacated units), and increases performance across the board. The alternative is to fashion an environment in which no one feels connected to anyone else and there’s little encouragement to stick around. The same principle applies to Praxis Capital’s environmental strategy: slowing the rate at which we burn through resources, on what’s ultimately a planet of finite size, benefits each stakeholder.
Everyone from multinational petrochemical firms to financial services giants have adopted socially conscious strategies to guide them through the future, with largely positive results. At its heart, having a social conscience is really just common sense. It’s not exactly radical to think that a company’s values perhaps ought to align with the values of the people whom its business directly affects: employees, customers, vendors, neighbors, and more. At Praxis Capital, we’re happy to be doing what’s right. Especially when it benefits more than just ourselves.