Ensemble/Mosaic Secures Minority-Led Capital for First Navy Yard Residential Project

by Navy Yard
October 19, 2023

Ensemble/Mosaic Continues to Deliver on Its Unprecedented DEI Strategy as it Secures Minority-Led Capital through Basis Investment Group for the First Residential Project at Philadelphia Navy Yard

Basis Investment Group Leads $100M+ Equity, Representing Minority-Led Involvement at Every Level of the Project

Release and photo courtesy of Ensemble/Mosaic and Basis Investment Group

PHILADELPHIA – October 18, 2023 – Ensemble Investments (Ensemble) and Mosaic Development Partners (Mosaic), in partnership with Korman Communities (Korman), today announced they have secured and completed debt and equity financing for the first residential project at the Philadelphia Navy Yard. The $285M mixed-use development will include luxury, furnished, market rate and affordable units as well as extensive amenities and retail.

The project includes minority- and women-led representation at every level, including but not limited to Ensemble/Mosaic – a joint venture between Ensemble and Mosaic, an MBE firm with a 22% ownership in the partnership – as the developer; the prioritization of minority-led design, engineering, and construction vendors; and the $100M+ in limited partner (LP) equity and preferred equity investments led by New York-based minority- and woman-owned Basis Investment Group (BIG).

Ensemble/Mosaic’s efforts at the Navy Yard include development and ownership of residential, life science, office, hospitality, retail, and community space. This phase of development will include 614 residential units across two buildings. More details will be released at a groundbreaking on October 24.

“From the day we announced that Ensemble/Mosaic would develop 109 acres at the Navy Yard for life science, corporate, hospitality and residential uses, we have been committed to creating equitable opportunities throughout all aspects of the project for minority- and women-owned businesses, and we are thrilled to announce a deal where 100% of the equity raised was led by such a firm,” said Brian Cohen, Managing Director, Ensemble. “Basis’s nimble investment platform and leadership was instrumental in securing funds for the project in one of the most difficult capital environments the industry has seen in decades.”

Basis is a registered investment advisor with a national commercial real estate investment platform established by Co-Founder and CEO Tammy K. Jones that lends/invests in both debt and equity strategies. The firm, which is more than 70% minority- and female-staffed, has successfully closed nearly $1.3B in investments with qualified minority and women sponsors across multiple strategies and asset classes, focusing across the US middle market.

“This development is a game changer for the continued revitalization of the Navy Yard because this phase brings critical housing (including affordable) and retail to an area that is already anchored by an active life sciences hub where more than 15,000 people are working,” said Tammy K. Jones. “Ensemble/Mosaic’s approach and commitment toward elevating an entire community with a focus on sustainability and inclusion aligns with our broader mission and investment strategy.”

 “This project was particularly exciting for Basis because it continues our long-standing and proven ability to identify and assemble top sponsorship and investment teams of color for large-scale development projects as part of our core ethos,” added Dale Burnett, Managing Director of BIG. “The Navy Yard is the latest in a series of DEI-oriented investments we’ve made including but not limited to our equity partnership with Tishman Speyer for a portfolio consisting of eight developments across nearly 3.1 acres in Downtown Santa Monica CA; and Related Beal’s 22 Drydock, a 319,000-square-foot, state-of-the-art life sciences complex on Boston’s waterfront”

“Basis’s capital investment is a continuation of our commitment to a DEI strategy that strives to create opportunity for minorities and women at every level,” said Leslie Smallwood Lewis, COO, Mosaic. “Whether working with Moody Nolan, the largest minority-owned architectural firm in the nation, on this building, or the nearly 15 minority- and women-owned entities that contributed to the 2022 Navy Yard Plan, inclusion is one of our guiding principles at every level.”

In addition to the equity investment by Basis:

– Approximately 50% ($4.3M) of the design and engineering of the project is provided by MWBEs

– 45% ($90M) of the construction spend will be committed to MWBE contractors

– 25% of the retail space will be reserved for minority and woman-owned businesses

– 2% of annual net cash flow will be donated to a foundation supporting the professional development and economic empowerment of minorities and women

“When selecting a development partner for the Navy Yard, PIDC intentionally prioritized diversity equity and inclusion,” said Kate McNamara, PIDC’s Senior Vice President, Navy Yard. “This market-leading partnership between Ensemble/Mosaic and Basis Investment Group goes beyond typical DEI strategies by extending equity and inclusion to the capital side of projects which will become the standard in how equitable development should be approached nationwide.”

 The development will be financed with two separate construction loans; a $78M facility provided by ULLICO, and a $95M participating facility involving M&T Bank (Agent Lender) and Israel Discount Bank of New York (Participant Lender). CBRE Capital Advisors, the investment banking arm of CBRE, in conjunction with the Philadelphia office of CBRE’s Debt and Structured Finance division, acted as the exclusive financial advisor for Ensemble/Mosaic and Korman Communities to secure equity and debt capital for the project.

“We are thrilled to be partnering with Ensemble Mosaic and Basis and our relationship lenders on this monumental development. For five generations, the Korman family has been a driving force for equality and opportunity within the Philadelphia region, and we look forward to continuing and growing upon those efforts with the AVE Navy Yard properties,” says Bradley Korman, co-CEO of Korman Communities.

About Ensemble/Mosaic and Its Partners
Ensemble/Mosaic is a joint venture between Ensemble Investments, LLC and Mosaic Development Partners. The partnership is the exclusive developer of a 109-acre mixed-use development at the Navy Yard in Philadelphia, including office, life science, retail, hospitality and the first residential complex to be built in the community. Ensemble/Mosaic, in partnership with PIDC, directed the creation of the 2022 Navy Yard Comprehensive Plan. Deeply committed to Environmental, Social & Governance (ESG), Ensemble/Mosaic has pledged $1B over the next 20 years to diversity, equity and inclusion (DEI) hiring and initiative.

Ensemble Investments, established in 1989 and with offices in Long Beach, California, Philadelphia and Phoenix, has successfully invested and developed more than $2 billion in real estate across the United States.

Mosaic Development Partners JV is a Philadelphia-based, minority certified (MBE) commercial real estate development firm established in 2008. Mosaic focuses on ground up development and adaptive reuse of land and buildings. For more information, visit www.ensemblemosaic.com, www.ensemble.net and www.mosaicdp.com

About Korman Communities
Korman Communities is a fully integrated, fifth-generation, 100-year-old real estate investment and property management company with development, management, asset, marketing, and financial capabilities operating throughout the United States and in London. Driven by a values system called QUEST, which represents Quality, Uniqueness, Excellence, Service, and Teamwork, Korman creates unparalleled value for all stakeholders by delivering industry-leading customer satisfaction through strong operations, quality offerings, and award-winning service. The Korman portfolio is comprised of two brands – AVE (aveliving.com) 15 Class A and Class AA, multi-family residential communities boasting over 4,000 units; and AKA (stayaka.com) luxury hotel accommodations. In the last two years, Korman Communities has acquired 13 properties and development sites to be added to the AVE portfolio. Korman is actively focused on opportunistic, value-add, and core-plus acquisitions, as well as ground-up developments in U.S. gateway and growth markets for both brands. For more information, visit www.korman.com.

About Basis Investment Group
Basis Investment Group is a full-service commercial real estate investment platform investing across the capital stack of stabilized, transitional, and development CRE assets throughout the United States. With representation in New York, Chicago, Dallas, Tampa and Irvine, CA, Basis has successfully closed over $5 billion in transactions across multiple strategies and asset classes focusing across the US middle market.

Basis, a certified Minority and Woman-Owned Business (MWOB), focuses primarily on investments in the middle market where it has deep relationships. Basis is a registered investment advisor and lender that invests in both debt and equity strategies including fixed rate senior mortgage loans, bridge loans, mezzanine loans, preferred equity, structured equity, JV equity and B-piece investments. Basis is also the only diverse-owned and licensed Optigo® lender for Freddie Mac and the only diverse-owned DUS® lender for Fannie Mae. For more information, please visit www.basisinvgroup.com.

About PIDC and the Philadelphia Navy Yard
PIDC is Philadelphia’s public-private economic development corporation. Since acquiring the 1,200-acre site from the federal government in 2000, PIDC has been the master developer and site operator of the Navy Yard. PIDC’s mission—to spur investment, support business growth, and facilitate developments that create jobs, revitalize neighborhoods, and drive growth to every corner of Philadelphia—strongly informs its strategy for the Navy Yard, where the focus is on building a cohesive community that fosters employment, innovation, and production. PIDC manages all aspects of the property’s management and development, including master planning, leasing, property management, infrastructure development, utility operation, and structuring development transactions. www.pidcphila.com | www.navyyard.org