Bob Faith’s goal is for Greystar Real Estate Partners to become the No. 1 or No. 2 apartment operator in most U.S. markets. Buying the competition is catapulting him toward that dream.
The acquisition of Dallas-based Riverstone Residential’s massive portfolio adds more than 170,000 units to Greystar’s platform, securing its place as the largest national property manager, by far.
The deal closed Monday for an undisclosed amount and was announced Wednesday. Faith says it was a deal that stemmed from long-term relationships and friendly competition.
Nick Gould and Peter Gould bought Dallas-based Riverstone in July 2006 and approached Faith at a conference later that year to introduce themselves.
“They told me they were going to build the biggest and best multifamily services company that had ever been,” Faith says. “And I said, ‘That’s great, that’s what we’re doing too.’”
Faith kept in touch with the duo and watched as Riverstone gained momentum over the years.
“We haven’t been strangers by any stretch of the imagination and this was not a situation where you have a distressed [company],” Faith says.
During a passing conversation late last year, the brothers told Faith they would be open to selling the company, making the large-scale merger a real possibility.
“They felt like what they were really good at is having big ideas and starting them up and they felt like they’d done that with Riverstone,” Faith says. “They felt [Greystar] would be a wonderful place for Riverstone associates to go. And now we’re taking that to the next level.”
Faith doesn’t look at the transaction as a stealthy ploy to axe the competition, but rather a marriage to stack the deck of his own company with high-quality, knowledgeable people.
It’s no surprise he speaks so highly of the Riverstone staff, since he once worked with several of its leaders during his tenure at Trammell Crow Residential.
Former Trammell Crow Residential Services leaders, Terry Danner, CEO of Riverstone, and Christie Freeland, former chair of Riverstone, spun the company out of Trammell Crow Residential in 2005.
Faith had worked at Trammell Crow as a partner in their Charlotte, N.C. office and started Greystar in 1993 with the hopes of becoming the best operator in the business.
“We are really trying to be that blue chip institutional company that is a go-to provider in the apartment industry,” he says.
But the melding of the two companies will hand Greystar a large-scale challenge as they now have more than 10,000 employees nationally.
“That’s a lot of folks to understand the direction we are sort of going and to keep ongoing communication open with,” he says. “We’ll have to think of better ways to continue to communicate with folks but we have been doing a good job of that.”
"We Can Get Larger"
Faith doesn’t plan to pump the brakes any time soon.
“We are still the largest, but we can get larger,” he says. “Combined we’re still a tiny percentage of the marketshare in the overall share of apartments.”
He wants to push growth in key markets including New York City.
“There are certain markets where we don’t have the marketshare to be No. 1 or No. 2 and we would like to have growth in those areas too,” he says.
Greystar is also making waves abroad as it continues to expand into Mexico and in Europe. The company purchased a $206 million student housing portfolio in London earlier this year.
“I would expect to continue to see us grow globally,” Faith says.
Faith isn’t showing any kind of interest in taking the company public either. He plans on continuing to foster growth as a private institution.
“This is a big move,” he says. “We will continue to try and make big and exciting moves.”
For an exclusive look at how Riverstone's and Greystar's rivals view the merger, click here.