Bain Capital Real Estate and Magnolia Capital have formed a joint venture to pursue opportunities to acquire, renovate and operate multifamily housing. The JV launches with the aim of investing $900 million the next few years. Incubation Capital Partners served as an advisor on the JV.
BOSTON and CHICAGO — November 16, 2020 — Bain Capital Real Estate and Magnolia Capital today announced the formation of a joint venture to pursue opportunities to acquire, renovate and operate value-added multifamily housing in primary and secondary markets throughout the U.S. The joint venture launches with the objective of deploying $900 million of gross capital over the next several years.
Bain Capital Real Estate and Magnolia Capital will initially focus on acquisitions in compelling Sunbelt markets, with a plan to purchase multifamily properties that have a “value-add” component, including executing capital upgrades to unit interiors, building exteriors and amenity spaces, and improving property operations through proactive asset and property management strategies. The venture will target well located, garden-style properties constructed between 1975-2000 with a rent profile that serves a middle income demographic.
“We believe this is a compelling opportunity to invest in markets where employment is expanding and at a time when multifamily housing in established neighborhoods continues to present attractive underlying fundamentals,” said Kavindi Wickremage, a Managing Director at Bain Capital Real Estate. “Our partnership with Magnolia Capital is rooted in our thesis that there is a long-term need for middle income housing, particularly in growing U.S. markets where housing affordability continues to worsen. We look forward to a productive and lasting partnership as we seek to increase the availability of housing that features compelling amenities at affordable price points.”
“Bain Capital Real Estate has a long-standing reputation as a thoughtful, valued add investor which shares our conviction for the multifamily housing space,” said Maxwell Peek, Founder, CEO & Managing Principal at Magnolia Capital. “We are excited to join forces as we launch this well-capitalized and differentiated partnership. Magnolia Capital has built an institutional, data driven investment platform with extensive multifamily expertise. We are appreciative of the opportunity to partner with Bain Capital Real Estate, and together look forward to executing on our investment strategy to acquire and operate institutional-quality multifamily housing in demand-driven growth markets throughout the U.S.”
Incubation Capital Partners advised the parties to this venture with capital placement services.
About Bain Capital Real Estate
Bain Capital Real Estate was formed in 2018 and pursues investments in often hard-to-access sectors underpinned by enduring secular trends that drive long-term demand growth for real estate assets and services. The Bain Capital Real Estate team has been executing its strategy since 2010 (formerly as a part of Harvard Management Company), having invested over $4 billion of equity in over 400 assets across multiple sectors. Bain Capital Real Estate focuses on small to mid-sized assets where the team applies its deep industry expertise to accelerate impact and drive operational improvements. Bain Capital Real Estate’s strategy aligns with the value-added investment approach that Bain Capital pioneered and leverages the firm’s global platform and significant experience across asset classes to further bolster its insights and sourcing capabilities.
About Magnolia Capital Group
Magnolia Capital is a vertically integrated real estate investment firm focused on identifying and creating value within the multifamily investment space. The company’s founding principals have a distinctive blend of institutional real estate investment experience combined with a deep knowledge of technology and operational efficiencies. Magnolia currently manages over $1.8 billion of real estate, representing 6,600+ units in fourteen markets across the United States. For more information please visit www.magnoliacap.com.