Q&A with Alicia Glen, Founder & Managing Principal of MSquared

Alicia Glen is the Founder & Managing Principal of MSquared, a women-owned real estate development and impact investing platform. Alicia worked at Goldman Sachs from 2003 to 2014 in the firm's Merchant Banking and Finance Divisions in New York.

Tell us about MSquared and the work that you do there utilizing your three-pronged approach of advising, building and investing.
Alicia: Cities across the country are facing increasingly serious affordability crises. For decades, rents have been rising while wages remain stagnant for most workers. As we come out of the pandemic, millions of Americans remain unemployed or underemployed, making it even harder for many families to find affordable housing. Yet developers, investors and the public sector are failing to provide anywhere near enough units for the people who are struggling to afford the rent.

That’s where MSquared comes in. We are leveraging our years of experience in the public and private sectors to fill a gap in the market. We develop and invest in mixed-income, mixed-use projects that deliver both risk-adjusted returns and demonstrable social impact. We don’t believe it is an “either/or” proposition. We know it can be a “both/and” for investors, and because MSquared is women-owned, we focus on providing capital to partners who are historically underrepresented in real estate. What our built environment looks like, how it functions and who owns those assets, must be inclusive and diverse.

How are you integrating sustainability into your developments and design?
Alicia: Obviously ESG investing is very much in the ether right now, but our whole company is based on ESG principles. We think about everything we do through social, gender, equity and sustainability lenses. In terms of our projects, we seek opportunities to build smarter and greener with energy efficient and sustainable design, embracing adaptive reuse, and focusing on transit-oriented development with lower parking ratios so we can help reduce carbon emissions. Building housing closer to where people work also reduces commutes, giving precious time back to parents.

You look at projects through a “gender lens” and take into account women and families. How do you do this and how did you come up with this approach?
Alicia: Housing is a women’s issue. Women are more likely to be severely rent-burdened, and they are more likely to serve as heads of household for Section 8 eligible families. Leaving the housing crisis unaddressed will only further disadvantage women in their fight for economic equality. The fact that our firm is women-owned and operated means we look at the world differently, plain and simple. When thinking about building design and layout, we consider details like whether the entryway will accommodate a double-wide stroller, or the importance of providing access to fresh food or day care within the building.

Our firm is unique because women simply are not represented in the industry – right now less than 1% of AUM in real estate is managed by women, and none of the Top 25 development firms are owned by women. That is unacceptable. So we are focused on using our extensive network to help capitalize other women-owned firms who have not had access to capital or investors who are willing to take a “risk” on them.

How has the pandemic changed the outlook of cities and your work? Do you see there being a lasting impact?
Alicia: I have never been more bullish on the future of cities. Of course, Covid-19 adds a layer of complexity to the housing crisis, but the initial data suggests that there remains a large unmet need for affordable housing in high-growth cities. The pandemic appears to have accelerated the long-standing migration trends in coastal and Sun Belt markets, which includes those cities that were supply-constrained pre-pandemic and where there is expected to be longer-term increases in under- or unemployment. Coupled with the existing structural housing market issues across the United States, these preliminary trends continue to make the case for investing in mixed-income housing in high-growth cities, especially as they experience an influx of young, affluent people moving in who can both work remotely and are more likely to be able to afford market-rate rents. I think there is also an opportunity to strategically leverage a temporary softening in some urban core markets to create mixed-income housing that will lock in affordability as a futureproofing strategy for these gentrifying cities and metro regions.

You launched and are the current Chair of women.nyc. Tell us about this initiative and your goals for its future.
Alicia: As Deputy Mayor, I felt that it was incredibly important for women in NYC to know that the City not only stands with them but can and will take an active role in supporting their careers. While there have been incredible gains for women over the past few decades, the reality is that women still lag in terms of salary, access to capital and leadership positions. We launched women.nyc to serve as a one-stop-shop for NYC women – through the web portal, women can access real tools to help them succeed in the workplace. Programs include free legal advice, business courses such as salary negotiation, information on accessing a loan, and industry-specific programs. The program proved incredibly nimble as the pandemic took off, and we were able to quickly pivot to offer access to these resources in the Zoom format, as well as to stand up programs to help women return to the workforce. We also just launched a “Childcare Innovation Lab” to re-frame access to childcare as a core economic development issue, rather than a private family matter. And I hope women.nyc will continue to evolve in this way – adapting in real time to address the needs of NYC women.

What is one of your proudest achievements from your time at Goldman Sachs?
Alicia: I never like to say one thing, and everything at Goldman Sachs is in threes anyway. So I’d say there are three things: First, building an unbelievably diverse and truly talented team at UIG. Second, doing extremely innovative first-of-their-kind transactions that other players have begun to imitate – whether it was interesting mixed-income, mixed-use projects, the first domestic social impact bond, or financing Citibike. And finally, I’m really proud to have played a key role in establishing Goldman Sachs as the thought leader and doer in urban impact investing.

What do you miss the most from your time working at Goldman Sachs?
Alicia: Fresca from the refrigerator! But in all seriousness, it’s hard not to miss the absolute depth of resources, talent and knowledge at Goldman Sachs. Everywhere you go within the firm there are really smart people you can draw on in a minute. It’s a truly invaluable thing that is really hard to recreate. I am so happy that Goldman Sachs has invested in MSquared, allowing us to continue our relationship going into the future.