A $405,000 acquisition loan from LISC supported by Starbucks made it possible for entrepreneur Ruben Perez to purchase a mixed-use property in Chicago. LISC financing is helping Perez build equity in commercial real estate and serve the low- and medium-income area of the city through his business Guerrero Produce.
Image above: Guerrero Produce on W. Cermak Road in Chicago
Ruben Perez is an entrepreneur who worked in sales for the meat industry for 20 years. In 2015, eager to broaden his own entrepreneurial journey and save on high commissions that ate into his revenue, he launched his own business, Guerrero Produce. The company purveys wholesale meat products to primarily Latin-owned restaurants and various grocery stores in the Pilsen, Little Village, and Addison areas of Chicago—under-served communities with historically limited access to the products Perez deals in.
Purchasing the building where Guerrero Produce operates on W. Cermak Road seemed like a natural next step in the growth of his business. Perez had spent his entire life in the neighborhood and has deep roots there. Built around 1908, the property is a five-unit building in a highly visible area close to mass transit. When Perez had the first option to buy from the owner, he jumped on the opportunity.
A few years ago, a $405,000 acquisition loan through LISC’s Entrepreneurs of Color Fund supported by Starbucks made it possible for Perez to purchase the mixed-use property. Now LISC financing is helping him build equity in commercial real estate and serve the low- and medium-income area of the city.
“The business is located in the Lawndale neighborhood on Chicago’s west side, a BIPOC community and a historically underinvested area,” said Vanessa Aguirre, LISC small business underwriter. “Although the business had been occupying the building for several years, it was difficult for them to secure financing from a traditional bank due to the owner’s immigrant status, language barrier, and lack of banking relationship. Since receiving the loan from LISC, he has been able to build equity by replacing rent with owning a commercial real estate asset and increasing income by leasing the four other units within the building.”
While Perez had experience investing in residential real estate, commercial real estate was new territory. “Getting to know the real estate process, getting to know how to purchase things, getting to know lenders, etc., has been a little bit difficult,” Perez said.
Competitive real estate prices and low property inventory added another layer of challenges, he explained. While attempting to secure financing through a mainstream institution and working with a loan officer who “made me jump through hoops,” one of Perez’s clients recommended he look into LISC. “Through the help of LISC, I was able to make my first mixed-use purchase and I’m hoping to make a second one,” he said.
Since the acquisition, the additional space has allowed Guerrero Produce to operate more efficiently and grow its business as a result. In addition to more revenue from rental income, the business now has an office space, and more parking space for delivery vehicles — a major upgrade for the company, for whom logistics are key to moving merchandise and delivering produce.
The opportunity to give back to the community has also been rewarding for Perez. “My clients are businesses normally in underrepresented communities with a lack of infrastructure and vendors,” he said. “We can get them the merchandise that they may not have access to otherwise due to supply chain issues, distance, and cost. We can make that a little bit more equitable for them.”