Founded in 2005 as the successor to a fifty-year-old real estate development company, Atlanta-based MDH Partners has participated in over $6 billion (80 million square feet) of acquisitions, developments, and asset management as an advisor and investor.
Both the firm and its founding principals, through their three-decades long careers, have consistently returned in excess of 25% IRR’s on investments, have never lost any investor’s capital, and have paid off every loan, despite working through multiple recessions and market corrections.
In 2019, MDH launched its first discretionary fund, MDH Fund I, raising $350 million from large university endowments and foundations. In 2021, it launched MDH Fund II, which was $575 million from the same investors and was subsequently upsized to $750 million in 2022, which it is currently investing throughout the US with a focus on the Southeast and Southwest.
Prior to launching its new fund, MDH entered into a programmatic joint venture with Bain Capital Real Estate and a major university endowment from 2014-2018, through which MDH amassed a portfolio of 14 million square feet of industrial properties across fifteen cities in eight states.
The company strategically assembled its portfolio in key growth markets and logistics hubs throughout the southeastern US by a combination of value-added acquisitions and speculative development.
Implementing a business strategy crafted in 2013, MDH targeted multi-tenant “last mile” facilities for its acquisitions and Class A logistics centers in its new developments, and built a portfolio to serve today’s booming e-commerce needs along with traditional local, regional, and national distributors. The MDH/Bain joint venture sold its portfolio to Blackstone in November 2018, achieving opportunistic returns, but MDH continues to serve as asset manager for Blackstone and retains a small ownership stake.
MDH advised Blackstone in 2010-11 in the acquisition of 45 million square feet of properties in 30 markets across the country in order to create IndCor, which would become the country’s second largest industrial real estate company before its 2015 sale to GLP. Simultaneously, MDH worked with Wells Fargo Real Estate Capital on the acquisition, repositioning, and sale of a number of distressed industrial properties coming out of the recession. Blackstone and Wells Fargo also each served as the capital partners for MDH’s earliest acquisitions of underutilized corporate manufacturing, distribution, and office facilities in 2005-07, all of which were redeveloped, leased, and sold at the market peak prior to the crash in 2008.
Jeffrey Small and Michael Pelt started the firm following the 2005 sale of their previous company, M.D. Hodges Enterprises, which lent its initials to the new venture. Mr. Small’s grandfather, Mark Durward Hodges – one of the Southeast’s iconic developers – founded the predecessor company in the 1950’s. Mr. Small, who worked summers as a teenager for his grandfather in the early 1980’s, joined the firm in 1993 and became CEO in 1997. Mr. Pelt joined Hodges in 1998 to head the company’s new office and mixed-use development division and then became its Chief Investment Officer, overseeing its acquisitions and developments. In 1999, Mr. Small sold his family’s business to Blackstone, who retained the management team to continue to grow the company. In 2005, Mr. Small sold the firm a second time on behalf of Blackstone to Clarion Partners. At its peak, Hodges owned 13 million square feet of office and industrial buildings, 1600 acres of commercial and industrial land, and 4000 acres of timberland.
Teamwork and Collaboration
As a testament to their culture of teamwork and collaboration, and their track record of consistently producing returns far in excess of the market, a number of former Hodges management team members rejoined Mr. Small and Mr. Pelt to become partners at MDH including Chris Stanley, Senior Managing Director – Development and Mike Herman – Managing Director – Operations. In creating and growing MDH Partners, the team is proud to follow in the footsteps of the late Mr. Hodges, who built a reputation for excellence, quality, and integrity.
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