3 min read September 2023 — In an interview with Invest:, Sal Lupoli, CEO and founder of Lupoli Companies, highlighted how social impact entrepreneurship focused on small businesses can help revitalize communities, the issues faced by Gateway Cities, and lastly how Lupoli Companies’ invests in economically challenged communities to create jobs, affordable housing and provide accessible education.
What are the key highlights and milestones showcasing the company’s overall impact and contribution to the area?
My journey began 32 years ago when I was at Northeastern University. Coming from a humble background in a tight-knit Italian family, I always had a desire for real estate. However, due to my lack of equity, I had to adopt a different strategy. I decided to open a pizzeria, specifically a pizza concept, because it was a way to make banks look more favorably upon me. It wasn’t just about purchasing real estate as I also operated a business within the real estate. Banks often looked more positively on individuals who were both property owners and operators. And so, I opened a small pizzeria with the intention of using its profits to buy real estate. Just nine months after opening the first pizzeria, I purchased a property that housed a defunct pizzeria. This strategy of using the operating company to acquire property was a way to show lenders that we were worth investing in.
At 22 years old, it was extremely challenging to convince lenders to provide financial support. They often asked for cash flow statements, balance sheets, and income statements, which I didn’t have at that time. So, I told them, “I don’t need you when I have all that; I need you now to get that.” I started with the purchase of one building in North Andover, Massachusetts. However, my approach changed due to my age and limited funds. I decided to focus on economically challenged communities. In Massachusetts, these communities are called Gateway cities, and there are 17 of them. Lawrence, Massachusetts, was the most economically challenged among them.
I chose Lawrence because I believed I could make a positive impact and create opportunities in this struggling community. Today, the Riverwalk Innovation District, the name of the campus we’ve helped create, stands as a testament to what can be achieved in challenged communities. Riverwalk has become a symbol of transformation, and we have acquired real estate in the three most economically challenged communities north of Boston: Lawrence, Haverhill and Lowell. In fact, we have undertaken the three largest projects in the history of these cities.
What emerging industries or sub-sectors do you observe capturing current demand, and what business opportunities are you considering in the current state of the industry?
One thing that often gets overlooked in this country is the obsession with landing big corporations like Raytheon, Google, or Microsoft when it comes to entrepreneurs and real estate. Entrepreneurs often put everything on the line and leverage themselves to the maximum to chase after these big names. But, I do things differently. I focus on the backbone of this country — the entrepreneurs and small business folks.
I own and operate about six and a half million square feet, exclusively, not as part of any fund or equity group. Additionally, we have another four million square feet in the pipeline for development. My primary focus is on the small entrepreneurs who have a passion for starting their own businesses, whether it’s a widget company or something else. You need space to kickstart your dreams, and that’s where I come in.
We’re not just growing businesses; we’re growing communities. So, my promise to others and entrepreneurs is that I’ll help them expand their business. I’ll provide the best rates, work with you on rent, and support you in various ways. But when you’re ready to expand, give me a chance to help you do that right here in Lawrence or one of these Gateway cities.
I’m proud to say that this philosophy has paid off as 35% of our growth has come from within our organization. That means we’re helping 200 tenants grow their businesses, hire more people and contribute to the local community.
What do you believe has been the catalyst for the current challenges in property insurance, particularly the skyrocketing prices?
Insurance companies often de-incentivize people from going into areas that are struggling as they often make it costly for businesses to operate in these communities, thereby discouraging entrepreneurs from investing there. When I first arrived in Lawrence, my insurance company refused to provide coverage within the city. That’s just one example of the challenges entrepreneurs face when they want to set up shop in these Gateway cities.
We’ve had to work tirelessly to find solutions. Even today, insurance costs in Gateway cities remain a significant hurdle for businesses. However, we’ve managed to find a way to address this. Once Riverwalk reaches its break-even point, anything beyond that becomes a pure profit opportunity to be aggressive in a leasing rate.
At Lupoli Companies, we sit down with businesses once they reach that break-even point. We take a close look at their expenses, including insurance. Then, we try to mitigate these costs by making adjustments in the rent. Some might argue that this approach doesn’t seem like a typical opportunistic or smart business strategy. But, let me tell you how it works.
We also take advantage of programs offered by these cities and towns, like Tax Increment Financing (TIF). TIF is directly linked to both business and real estate taxes. By investing in real estate and creating jobs, we can negotiate a reduction in real estate taxes. We then pass those savings on to the tenant in the form of a rent credit, and this helps offset the rising costs of expenses like insurance.
What initiatives or projects are you excited to push forward for Lupoli?
We are social impact entrepreneurs and I firmly believe that Lupoli Companies stands for something quite special. We come from humble beginnings, and we understand the value of a good meal with family. There’s a different drive behind that impact you want to make, which is why we see ourselves as social impact entrepreneurs. This term combines entrepreneurship and innovation with a strong commitment to making a positive impact on communities. We purchase neglected buildings that others don’t want and turn them into valuable assets.
Therefore, moving forward, our vision is clear. We’re doubling down on our commitment to economically challenged communities, investing in job creation and market rate housing. However, it’s not just about housing. We want to encourage people with disposable income to come into these communities and spend locally.
We’re taking concrete steps to achieve these goals. We partner with community colleges because we believe they provide an affordable path for individuals in Gateway cities to elevate their lives through education. At Lupoli Culinary Institute, a partnership between us, Northern Essex Community College, and the state of Massachusetts, we offer classes that can fit your schedule and help fill in gaps in your education, whether it be classes in HR, business, accounting, or sales, that could be a game-changer. We named it after my parents, the Lupoli Culinary Institute, and it’s designed to be accessible and affordable, just like community colleges. Additionally, we’ve created what is called the Revolving Test Kitchen. It’s another example of our commitment to social impact. In truth, it is the entire Lupoli family which has been instrumental in our businesses success. The support of my wife Kate, daughter Mary and son Sal Junior and their belief in me has always driven me forward to strive for more and leave behind a lasting legacy. Following my graduation with a master’s from MIT Sloan School of Management, I also now feel equipped and ready to work harder than ever before to create sustainable livelihoods for all our employees — the extended Lupoli family.
Our future involves doubling our investments in underserved communities, creating jobs, and providing accessible education opportunities. These steps are part of our vision as social impact entrepreneurs, and this is what makes Lupoli Companies truly special.
Top image via Riverwalk Innovation District
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