New $1B Multifamily Venture Targets Workforce Housing

As reported by Bisnow, Aion Partners has launched a $1B joint venture with Goldman Sachs Alternatives (GS) and another institutional investor to acquire 4K–6K value-add multifamily units.

Long-Term Outlook

Michael Betancourt, founding partner of Aion Partners, believes the multifamily market will experience increased deal flow in the coming year. 

The new joint venture intends to capitalize on this shift by targeting properties in under-supplied regions where affordability and rent growth present opportunities.

“We hope to be early movers into this next cycle,” Betancourt said. “Sellers are beginning to acknowledge price drops of 10% to 20% from the 2022 peak, and we expect the market to open up early next year.”

Focus on Workforce Housing

Since 2011, Aion Partners has concentrated on workforce housing, acquiring and renovating Class-B and C properties in slower-growth regions often overlooked by institutional investors. 

Betancourt highlighted that the Midwest and mid-Atlantic markets, with tight supply and rising rents, are especially attractive for this strategy.

Regions like Northern Virginia have experienced notable rent increases, with YoY growth reaching 4.5% through the first nine months of 2024. Aion’s established presence in states such as Indiana, Ohio, Pennsylvania, and Virginia positions the venture to meet demand in these high-growth areas.

Securing Capital at Scale

The $1B JV is 51% owned by Aion’s third discretionary fund, Aion Value Add III LP, and 49% owned by the unnamed institutional partner. The venture has raised $300M in equity, supplemented by debt financing, and plans to close its first deal in early 2024.

In addition to the new venture, Aion recently completed a $700M recapitalization for a 4K-unit portfolio in New Jersey, Pennsylvania, Maryland, Delaware, and Virginia. 

The recapitalization includes $70M earmarked for renovations over the next 5–7 years, ensuring the portfolio aligns with the venture’s value-add strategy.

Long-Term Shift

Aion’s pivot to multifamily properties began after the Global Financial Crisis, when it shifted away from office and retail assets. That move proved prescient as office property valuations have struggled in the wake of the pandemic.

Betancourt emphasized multifamily’s advantages, including lower tenant retention costs and access to government-backed financing. “Residential housing has an unfair advantage,” he noted, “and that’s why it’s the largest asset class in commercial real estate with some of the highest returns.”

Why It Matters

With its new JV, Aion Partners is doubling down on workforce housing as market conditions start to shift. 

By focusing on supply-constrained regions and leveraging institutional partnerships, the firm aims to position itself as a leader in value-add multifamily investments as the next cycle unfolds.