Matt Bedsole is not a normal investor. He is the CEO of Invest Chattanooga, a fund set up by the city of 200,000 to invest in local apartment projects. Unlike private equity firms — the main backers of new construction — he judges deals not solely on their financial return but also on how much housing they can deliver the city.
The apartment complex cleared that hurdle. It called for 170 units that would replace a self-storage center ringed by barbed wire in a gentrifying part of the city. But Bedsole had terms. In exchange for the $8 million investment, he got a 51% stake in the building and an agreement that 30% of its units be priced below the market rate. The developers said yes. They closed the deal over pastrami sandwiches.