Impact invest­ing in real estate comes with a dual expec­ta­tion: projects must be finan­cial­ly sound and deliv­er a real, ver­i­fi­able social ben­e­fit. Because real estate devel­op­ments involve long time­lines, diverse user groups, and com­plex inter­ac­tions with local author­i­ties, mea­sur­able results are essen­tial for cred­i­ble impact claims. With­out a struc­tured method, it’s often unclear whether a project is tru­ly solv­ing a prob­lem or sim­ply com­mu­ni­cat­ing good inten­tions.

Fiona Exn­er, Impact Invest­ing Man­ag­er at Next Gen­er­a­tion Invest

The IMM­PACT Guide – devel­oped by Ber­tels­mann Stiftung, PHI­NEO, Bun­desver­band Impact Invest­ing (BVII) and Social Entre­pre­neur­ship Net­zw­erk Deutsch­land (SEND) – offers a clear frame­work to address this. Its sys­tem­at­ic guid­ing ques­tions, from needs assess­ment to impact assump­tions to KPI log­ic, make impact rea­son­ing more trans­par­ent and com­pa­ra­ble. The frame­work deliv­ers the method­olog­i­cal clar­i­ty that is often miss­ing in the real estate sec­tor and, at the same time, pro­vides an easy entry point for all stake­hold­ers. It enables teams to get start­ed quick­ly with­out first hav­ing to nav­i­gate com­plex the­o­ry. This low­ers bar­ri­ers to enter­ing the impact mar­ket and cre­ates a shared foun­da­tion for col­lab­o­ra­tion – and for reflect­ing crit­i­cal­ly on exist­ing busi­ness mod­els.

Fur­ther devel­op­ment of the IMM­PACT Guide for the real estate sec­tor

To meet the spe­cif­ic needs of the sec­tor, we fur­ther refined the approach with­in the Real Estate Work­ing Group of Germany’s Bun­desver­band Impact Invest­ing and adapt­ed it to real-world trans­ac­tions. This led to a prac­ti­cal guide and an accom­pa­ny­ing invest­ment check­list based on the IMM­PACT frame­work. Togeth­er, they give project devel­op­ers and investors a sim­ple but robust struc­ture for plan­ning, mea­sur­ing, and com­mu­ni­cat­ing impact. This is par­tic­u­lar­ly valu­able for teams with strong ideas or avail­able prop­er­ties but no estab­lished method for assess­ing their impact. Both tools – the IMM­PACT Guide and the prac­ti­cal real estate add-on – serve as acces­si­ble entry points and sup­port a fast-grow­ing ecosys­tem of com­mit­ted impact actors across the real estate sec­tor.

NEXT Gen­er­a­tion Invest works inter­nal­ly with an impact man­age­ment and mea­sure­ment approach that close­ly fol­lows this log­ic. Needs assess­ments, a The­o­ry of Change, impact goals, and action­able KPIs form the core. This is com­ple­ment­ed by stan­dard­ized due-dili­gence tools, reg­u­lar impact per­for­mance reviews, and clear col­lab­o­ra­tion process­es with part­ner orga­ni­za­tions.

Prac­ti­cal exam­ple: Frank­furt Hausen

How this struc­ture plays out in prac­tice becomes clear in the Frank­furt Hausen exam­ple The prop­er­ty – orig­i­nal­ly designed as a social hous­ing com­plex – faced high rents, lim­it­ed inter­ac­tion between res­i­dent groups, and resis­tance in the neigh­bor­hood before NEXT GI took it over. Using the IMM­PACT guid­ing ques­tions, the team began by iden­ti­fy­ing the spe­cif­ic needs at the site: afford­able hous­ing for stu­dents, peo­ple with spe­cial hous­ing require­ments, and – increas­ing­ly since the war in Ukraine – refugees. These needs were trans­lat­ed into a The­o­ry of Change with three core impact goals:

1. Increase afford­abil­i­ty, includ­ing an aver­age rent reduc­tion of around 20% for stu­dent apart­ments.
2. Strength­en social inte­gra­tion through redesigned com­mu­ni­ty spaces and a leas­ing mod­el that incor­po­rates vol­un­teer engage­ment.
3. Acti­vate the local ecosys­tem by involv­ing com­mu­ni­ty-ori­ent­ed asso­ci­a­tions and munic­i­pal part­ners.

Impact is mea­sured through clear­ly defined KPIs such as rent relief, qual­i­ty of inter­ac­tion, ten­ant mix, and reg­u­lar feed­back from key stake­hold­ers.

This exam­ple shows that impact doesn’t hap­pen by acci­dent. It’s the result of struc­tured strat­e­gy and inten­tion­al design. The IMM­PACT Guide and the prac­ti­cal real estate add-on offer valu­able direc­tion – help­ing estab­lish a shared under­stand­ing of impact in the real estate sec­tor. Any­one who wants to mea­sure impact cred­i­bly needs both a clear method­olog­i­cal frame­work and a will­ing­ness to col­lab­o­rate close­ly with local stake­hold­ers.