Alicia Glen is used to holding powerful jobs. She’s been an investor at a big Wall Street institution and New York City’s deputy mayor charged with spurring a new generation of affordable housing.
In her latest role, she’s merging the experiences gained in both roles.
She recently founded MSquared, a women-owned real estate development and investment platform that’s just raised $107.6 million in its Equitable Housing Solutions Fund I (EHSF), which will invest in mixed-use, mixed-income projects across the nation, with a focus on women- and minority-owned development teams.
EHSF raised capital through a combination of private and nonprofit partners, including Citi Community Capital, the Urban Investment Group within Goldman Sachs Asset Management, Wells Fargo, and the Community Preservation Corp.
“I had these two big jobs, where I got to see both sides of the equation. When I left City Hall, it was natural to want to bring those sides together,” Glen says. “I have experience on the investor and capital markets side and experience at the highest level of housing policy and government. I wanted to start a firm that does just that, that’s laser-focused on building and investing in projects that are truly mixed-income and mixed-use. That is our purpose—to bring more capital to do more deals. That’s our DNA.”
The second reason is to change a field that has few women at the helm.
“I said, ‘I’m going to start a women-run real estate platform that focuses on women,’” she says. It’s important to me that women and people who have traditionally not been part of the story become major players.”
Glen was head of the Urban Investment Group at Goldman Sachs. Under her leadership, the group deployed over $1 billion of the firm’s capital, catalyzing more than $5 billion of mixed-used developments around the country. She then served as deputy mayor from 2014 to 2019.
Creating New Units
Now as the managing principal of MSquared, Glen plans to prioritize ground-up development and adaptive-reuse projects that will create new housing opportunities.
“There are others who are buying and selling existing workforce housing and preservation with interesting strategies, but that doesn’t add to the stock. We have a massive, massive housing affordability crisis but also a housing shortage. We want to be adding units,” says Glen.
One of MSquared’s first deals will be in Austin, Texas, where the average rent for a one-bedroom apartment is $1,500, a 17% increase from the prior year, according to Zumper.
In partnership with two other women-led firms—O-SDA Industries and Saigebrook Development—and Austin-based 3423 Holdings, the company plans to develop 335 mixed-income apartments, with 60% set aside as affordable for a range of incomes.
The project will also include nine affordable townhomes for sale developed in partnership with Habitat for Humanity. Directly adjacent to the Capital MetroRail’s Crestview Station, the project will have a new 4.7-acre public park and numerous community-oriented spaces, including an affordable child care center, a health care and wellness center, an artist studio and exhibition space, and two restaurants showcasing local food operators. MSquared and its partners were designated by the city of Austin and approved to develop the city-owned site by the City Council in August.
Glen is also looking at a deal in New Jersey, where the project will be half market-rate and half affordable housing. The affordable component will vary from project to project.
MSquared is largely an equity platform. It may do a mezzanine piece at times, but Glen sees the firm’s role as a traditional equity partner.
The firm comes at a time when there’s growing conversation and intent around supporting more women- and minority-led businesses. MSquared is different because it’s part of that group, insists Glen. “We are them,” she says. “It’s not a side hustle. It’s core to our identify.”
Building on the EHSF strategy, MSquared is raising money for its Impact Partners Fund I. Target investors include family offices, high-net-worth individuals, and foundations. “Targeting $150 million, the fund will invest in mixed-income, mixed-use projects that promote a holistic approach to a livable city: one that is affordable, sustainable, diverse, and interconnected,” says the company.
Glen adds that it’s important to think about the lessons learned from COVID-19, including how people and their communities are linked. Glen cites how nurses are living two hours outside of a city and grocery store employees were struggling to get to work.
“I feel now is a time for people to think through what healthy and equitable growth looks like and really embrace it, and that means investing in mixed-income communities so we can have the diversity that we need to grow and be a healthy country,” she says.