NBA All-Stars Invest in $1 Billion Harvard Real-Estate Development – The Wall Street Journal

That group also includes Black and Latino lawyers, doctors, tech workers and real-estate professionals.

After developer Tishman Speyer submitted a proposal to build the project, Harvard asked the New York firm if it would commit to selling 5% of the development to Black and Latino people. Tishman agreed, said Chief Executive Rob Speyer.

The first phase of the new development, which is currently seeking city and state approval, would span around 900,000 square feet and feature lab space, offices, retail, apartments and a hotel. Tishman Speyer is building the project on land that it will lease from Harvard University’s Allston Land Company for 95 years.

Harvard wanted to ensure that a diverse set of people benefit from the development, said Penny Pritzker, the former U.S. Commerce Secretary and a member of the board of the Harvard Allston Land Company.

“There’s a massive disparity in wealth creation in communities of color compared to white communities,” she said. “And so, why is that? Well maybe it’s access to good deals.”

The Black and Latino investors are accredited investors, which means they have an annual income of more than $200,000 or a net worth of more than $1 million, not counting their primary residence.

Although developers can raise funds from lower-income investors through a public offering, that often comes with additional reporting requirements, and Tishman Speyer chose not to follow that route.

“A public offering for a roughly 5% interest is incompatible with the rest of the project, which was structured as a private offering, as is standard for large-scale development projects,” said Tishman Speyer’s general counsel Michael Benner.

James H. Simmons III, CEO of real-estate firm Asland Capital Partners and an investor in the project, said well-off Black people generally don’t get invited to invest in as many private real-estate deals as white people of similar means.

“There is a reason why it is defined as ‘friends and family,’” he said, referring to the common practice of developers raising money from people they know.

Private entities very rarely set race-based quotas for commercial real-estate investment, and Mr. Simmons said he hopes the Harvard deal, if successful, will become a model for others to follow.

Harvard established the land company in 2018 to oversee development of the 36-acre site, which sits close to the university’s business school in the Allston neighborhood. The university plans to bring in research-focused companies and startups, among other businesses. The project will also include green spaces and a conference center. Harvard picked Tishman Speyer to develop the first phase, which covers around 14 acres, in 2019.

Mr. Speyer said he built his new network of Black and Latino investors, thanks to intermediaries like Mr. Simmons and Rudy Cline-Thomas, the founder of investment firm Mastry Inc. who brought in the NBA players and four National Football League players.

Mr. Lowry and his peers aren’t the first National Basketball Association stars to invest in large real-estate projects. Earvin “Magic” Johnson, for example, invested in a number of properties through the venture Canyon-Johnson Urban Fund and retired forward Luol Deng has amassed a sizable commercial real-estate portfolio.

Write to Konrad Putzier at konrad.putzier@wsj.com