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His crusade to house LA's poor wins praise from Oprah, Garcetti. But others have doubts

Doug Smith, Los Angeles Times on

Published in News & Features

“We bought about 150 buildings,” Muoto said. “It takes time. You can’t simultaneously rehab 150 buildings.”

The child of a Nigerian father and Polish mother, Muoto parlayed his graduation from a Christian boarding school in rural Nigeria to a degree from the University of Pennsylvania’s Wharton School of Business. He sharpened his financial skills at national venture capital firms before turning his attention to what he believed to be undervalued real estate in South Los Angeles.

Starting in 2009, Muoto first invested his own money in several Los Angeles properties — as well as a parcel in Pacific Palisades where he built the house he lives in. He formed SoLa in 2015 and, under its banner, raised $10 million in private capital, promising investors double-digit annual returns if they were willing to wait seven to 10 years before cashing in.

While still spending that money, he raised a second fund of $55 million. The buying became frenzied: 40 properties in 2017, then 71 the next year. Leveraging the investor funds with bank loans, SoLa ultimately poured nearly $200 million into about 200 South Los Angeles properties.

In 2019, Muoto pivoted into new construction.

“We had saved and were rehabbing 1,200 units, but we hadn’t added a single unit to the inventory in Los Angeles,” Muoto said. “That bothered me, right? We’re not solving the problem.”

 

SoLa raised another $115 million and bought up 28 additional properties, taking advantage of the recently adopted opportunity zone law that provided generous capital gains write-offs to investors in low-income neighborhoods. Many were either vacant land or tear-downs such as the former church on Avalon Boulevard and 64th Street, where the television crews came to see the new apartment building.

Besides the 12 projects now in construction, SoLa is working on permitting or negotiating for properties that will support an additional 1,876 units, the company’s co-founder and Chief Operating Officer Gray Lusk said.

SoLa also broadened into commercial real estate, buying a complex of derelict buildings on East 60th Street in the heart of a pre-WWII warehouse district. SoLa’s 140 employees now occupy the renovated campus of boutique offices surrounded by sophisticated landscaping. When the construction is done, the campus will be home to an art gallery, two restaurants and a Black-owned brewery.

There’s also a tech laboratory, complete with recording and live performance studios. SoLa’s nonprofit arm, the SoLa I CAN Foundation, has raised millions of dollars — most recently $2 million from the video game producer Riot Games — to provide free technology education to South Los Angeles youth and to hand out scholarships.

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