Mount Auburn is focused on secondary markets with business-friendly environments popular among millennials. These markets typically have a low cost of living and a growing population.
“We’ve been buying in high-growth secondary markets since the inception of the firm,” said Matt Pavlovich, an executive vice president with Mount Auburn. He added that the company manages its own properties and improves them.
Target markets include Atlanta; Austin, Texas; Charlotte, N.C.; Columbus, Ohio; Dallas/Fort Worth; Denver; Houston; Indianapolis; Jacksonville, Fla.; Louisville, Ky.; Nashville, Tenn.; Orlando, Fla.; Phoenix; Raleigh, N.C.; Salt Lake City; San Antonio, Texas; Tampa, Fla.; and the suburbs of Washington, D.C.
Beyond just location, Pavlovich said the company is looking for properties it can improve, specifically sites built in 2010 or later with at least 200 units.
The company is also interested in ground-up development. In 2021, roughly one-third of the Mount Auburn’s properties were ground-up developments. Pavlovich said that number would increase to closer to 50% in the next several years, and he hopes to double the firm’s assets under management to $4 billion in the next five years.
“We really like the risk-adjusted returns of these preferred equity investments relative to the equity returns achievable in today’s acquisition environment,” he said.
Pavlovich said the investment from Ivanhoé Cambridge will further Mount Auburn’s strategy of continuing to invest in developing multifamily projects.
“They share in our vision of long-term ownership in the secondary markets,” he said. “They are a great growth partner for us.”
Under the terms of the investment agreement, Ivanhoé Cambridge leadership will join Mount Auburn’s board.
Hogan Lovells acted as legal counsel to Ivanhoé Cambridge, and Szenberg & Okun served as legal counsel to Mount Auburn Multifamily for the investment.
The two companies have previously worked together.
In June, they teamed up to launch a joint venture to invest in preferred equity for ground-up multifamily developments.
The partnership is focused on the same markets being targeted by the new investment.
“We continue to view U.S. multifamily as an attractive asset class, and this investment into Mount Auburn allows us to gain exposure into a portfolio that contains more than 10,000 units in markets that are well-positioned for durable growth,” Charles-Antoine Lussier, senior vice president at Ivanhoé Cambridge, said in a statement.
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