Bain Capital Real Estate and Magnolia Capital 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 and Magnolia 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. ”
Maxwell Peek, Founder, CEO & Managing Principal at Magnolia Capital, added, “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.