Alicia Glen, founder and CEO of MSquared
Alicia Glen leverages her expertise as former New York City Deputy Mayor and Director of the Urban Investment Group at Goldman Sachs to build MSquared into a leading women-owned real estate development company focused on affordable housing. MSquared has raised more than $200 million in three years, a feat few women have achieved.
Affordable housing is a women’s issue. Women face greater challenges than men in finding affordable housing, impacting their economic security and well-being. The reasons include the gender pay gap, single parenthood, domestic violence and homelessness. Providing women with affordable housing makes them more likely to obtain stable employment, improve their overall health, and give their children a better start in life.
Glen’s focus on bringing more capital to build mixed-income and mixed-use projects addresses the housing crisis and breaks down barriers for women and minorities in this area.
Sexism is alive and well in real estate development
Women represent more than 50% of the American adult population. Yet, according to the Knight Diversity of Asset Managers Research series, they have 2.8% of real estate funds and hold 1.7% of assets under management. Women-owned businesses perform as well as men-owned businesses.
While it’s encouraging that Glen has surpassed $200 million in assets under management, men with the same experience would have raked in far more. “I know how difficult it was for me to raise the bar, but it would have taken two phone calls to my male counterpart,” she said. “If you’re a very smart young woman trying to raise capital and you don’t have the kind of detailed resume that I have, I can’t even imagine how difficult it is.”
One of Glen’s goals is to inspire other women and people of color to start real estate investment funds. She is not alone. Deborah Harmon and Penny Pritzker started open the way in 2009, when they co-founded Artemis Real Estate Partners and also try to be models.
Research in an adjacent sector – venture capital – reveals that women and POC face both challenges and opportunities. Limited partners – institutional investors who invest in funds – are increasingly focused on experienced fund managers. Most women and POC are emerging managers. They raise their first three funds. Yet research reveals that 72% of top-performing companies Venture capital funds are emerging managers, so women and POC funds are a good bet.
Women represent 37% of the commercial real estate workforce, according to the 2020 CREW Network Benchmark Study: Gender and diversity in commercial real estate. Systemic barriers women face include being paid less and promoted less. These gaps have a cumulative impact on their ability to launch funds.
“It is absolutely astonishing how underrepresented women are. [in real estate fund ownership]”, Glen said. “Women don’t control capital and don’t build buildings. [in cities].”
After serving as deputy mayor of New York City, Glen took some time to figure out what she would do next.
Thriving cities depend on affordability, sustainability and diversity
MSquared, Pennrose and the Westminster Economic Development Initiative collaborate with The … [+]
Glen grew up on the Upper West Side, where there were public housing projects, Mitchell-Lama cooperative housing for moderate- and middle-income families, and brownstones for high-income families. Everyone attended the same public schools, had access to Central and Riverside parks, and participated in extracurricular activities at Goddard Riverside and Head Start.
“I grew up in a neighborhood where I wasn’t afraid of blacks and Hispanics,” she said. Black, brown, and white children went to school together and played together. “I lived on Central Park West, but my parents were public employees,” Glen said.
Strong communities are a women’s issue. The well-being of women and girls depends heavily on their access to safe, affordable and integrated housing. Unfortunately, despite being heads of 75% of households receiving rental assistance from HUD (Department of Housing and Urban Development), only one in four eligible women receive this assistance. This disparity leaves millions of women, especially those from marginalized communities, struggling to obtain basic housing for themselves and their families. Ensuring equitable access to affordable and accessible housing is crucial to combating women’s economic insecurity.
“Everyone complains that there are no women in the real estate industry,” Glen said. So she decided to walk the talk and launch a real estate development and investment platform focused on mixed-income and mixed-use projects that promote affordability, sustainability and diversity.
“I have dedicated my career to making cities better places to live. I developed a real sense of what good cities look like and what kind of development we need to continue to make them grow and thrive in a way that makes them diverse, fun, interesting and prosperous.
Glen is determined to raise significant funds and partner with female developers. To date, MSquared has raised over $200 million. Investors in three funds include Capricorn Investment Group’s Sustainable Investors Fund, Citibank, the Ford Foundation, Goldman Sachs, the Skoll Foundation, Trinity Church Wall Street and Wells Fargo (WFC).
Like women seeking venture capital, women-owned real estate funds do not have access to institutional investors such as pension funds, insurance companies, endowments, mutual funds investment funds, hedge funds, banks, family offices and sovereign wealth funds.
However, unlike venture capital, real estate is a more capital-intensive business. Owners must contribute two and a half percent of the fund. “So you either have to have earned some money or be able to convince your friends and family to support you,” Glen said. “Women don’t have that kind of network of friends and family.”
One of the keys to Glen’s success is that she is relentless but has a sense of humor. “You just have to keep going,” Glen said. “You also have to be able to have a sense of humor, otherwise you get angry and discouraged.
How are you going to change the situation for women?