MSquared, a women-owned real estate development and investment platform, today announced that the Ford Foundation and Skoll Foundation have joined its MSquared Impact Partners Fund I (MSIP). The Fund invests in mixed-income projects in cities nationwide, with a focus on directing capital to women- and minority-owned development teams. MSquared’s first close on MSIP was anchored by Capricorn Investment Group’s Sustainable Investors Fund with additional capital from a combination of individuals, family offices and private wealth platforms. With these new investors, along with initial investors, including Citibank, Goldman Sachs, and Wells Fargo, the firm is now well over $200 million in assets under management.
“The status quo in real estate development is simply not working for the vast majority of people,” said Alicia Glen, Founder & Managing Principal of MSquared. “We need a fresh approach with new perspectives and new players who want to do things differently. We know that where we live has a profound impact on life outcomes – by creating new developments that are available to people at a wide range of income levels, we are not just filling an essential need for more affordable housing, we’re also addressing long-standing societal inequities. We’re excited that our strategy has resonated with both institutional and non-institutional investors and are optimistic that others will want to be part of advancing this important work.”
“We are excited to support MSquared’s work. They are creating impact along multiple dimensions that we care about – providing affordable housing and promoting diversity and equity,” said Roy Swan, Director of Mission Investments, Ford Foundation. “Our investment represents Ford Foundation’s ongoing commitment to amplify the impact we have on the grant-making side by making impact investments out of our endowment.”
“MSquared’s differentiated platform in the real estate private equity landscape and their focus on providing mixed-income housing and new development is compelling for institutional investors seeking strong risk-adjusted returns and meaningful social impact,” said Marla Blow, President and COO at the Skoll Foundation. “This investment is indicative of the power and potential as Foundations engage both the program work and the investment assets to drive transformational social change.”
Last month, MSIP closed on its third investment in the portfolio, Kōz on Alderwood, in Lynnwood, Washington. In line with the firm’s strategy, MSquared is partnering with another women-led firm, Kōz Development, on the transit-oriented project which will deliver 200 homes, half of which will be affordable. In February, MSquared and Mintwood Real Estate, another women-owned firm, broke ground on Oakhouse, a 219-unit mixed-income development in the North Cliff area of Dallas, Texas. Half of the units will be set at rents affordable to households earning 80 percent of area median income (AMI) through a partnership with the City of Dallas that will preserve the complex’s affordability long-term. The Fund also provided equity for Square 10, a mixed-income, mixed-use development in New Haven, Connecticut. Square 10 will add 200 units, 40 of which will serve families earning between 50 and 100 percent of AMI, and will include 16,000 square feet of retail and restaurant space, plus 25,000 square feet of public open space. MSIP’s first three investments will produce over 600 new units of housing worth more than $200 million in development value. MSquared expects the portfolio will ultimately produce approximately 2,000 units, worth $1 billion in development value.
MSIP differentiates itself from other real estate funds through several factors. Unlike many housing funds, MSIP prioritizes ground-up developments that add new housing stock and that integrate market-rate units alongside affordable units. With this more equitable and inclusive approach to development, households have the same access to neighborhood resources, like high-quality housing, education, healthcare, transit, and job opportunities. MSIP also looks to incorporate important commercial components that benefit the community at large, such as daycare centers, and space for local non-profits and small businesses. The Fund also targets capital to women- and minority-led developers who are badly underrepresented in the real estate ecosystem and promotes sustainability by investing in transit-oriented projects and incorporating sustainable design practices.
