'It’s a really solid asset class': Private capital warms to affordable housing

A recurring theme in real estate private equity this year has been the proliferation of capital into so-called “niche” or alternative property types beyond the traditionally institutionalized sectors such as office, retail, industrial, multifamily residential or hotels.

But while much attention has been paid to the emergence of segments including data centers, student accommodations or outdoor storage, another area of rising conviction among both institutional investors and their asset managers is affordable housing – particularly in the US, where mounting supply shortages have evolved into what most observers describe as a crisis.

Increasingly, private market investors want to be a part of the solution, and a growing cohort of asset managers are devising ways to address the problem while also creating strong opportunities for risk-adjusted returns.

On this episode, co-host Greg Dool is joined by PERE Credit editor Samantha Rowan and PERE Deals editor Guelda Voien for a look at why affordable housing is increasingly viewed as a strong match for institutional investment portfolios and the managers hoping to capture those allocations. We also hear from Alicia Glen, founder of New York-based private equity firm MSquared, which is currently raising its second impact-focused essential housing fund, in conversation with PERE Podcast co-host McKenna Leavens.

Further reading:

• PERE: MSquared’s Glen: ‘We need to do things differently’ in affordable housing
• PERE: CIM Group holds first close on debut fund focused on US affordability crisis
• PERE Credit: Mamdani win underscores need for affordable, middle-income housing
• National Association of Realtors: First-time home buyer share falls to historic low of 21%, median age rises to 40
• American South Capital Partners announces $60 million first close of its third affordable housing fund
• Federal Reserve Bank of New York: 2025 Case Study on Managers of Multifamily Affordable Housing Private Investment Vehicles