In just three short years, McLean, Va.–based Jefferson Apartment Group (JAG) has gone from being the new kid on the block to taking its place as a serious multifamily player in the Mid-Atlantic region. And though its portfolio may not rival the size of some of the major REITs in the area, JAG is staking its claim in metros up and down the East Coast, thanks largely to the vision of president and CEO Jim Butz.
The lion’s share of JAG’s Mid-Atlantic presence is in Washington, D.C., where the firm has six properties under ownership or management. But in one of its latest moves to diversify, Jefferson is looking to Florida, where it had three development projects under way as of the end of 2012. And thanks to the growing success of Butz’s rehab and property management efforts there, he says the Atlanta metro, too, is on his radar as a long-term part of JAG’s diversification initiative.
JAG surpassed its growth goals for 2012, closing five new development deals instead of the four it had targeted, and it doubled the head count of its property management division, with new hires to support the firm’s Boston, Philadelphia, and Florida offices.
But perhaps the most positive change Butz has seen in the company’s brief history is its planned entry into the new construction business. To this point, the company has used third parties for the limited new construction it has done. But Butz is bullish on apartment fundamentals in metros like Boston, Baltimore, and Washington, D.C., and JAG has been adding in-house construction expertise in advance of an active pipeline.
“There are good production opportunities in places like Washington, D.C., in the next year or so because lots of the deals there now won’t get financed,” says Butz. “We believe that for the next two or three years, the strength of the market will continue to improve.”
Butz is clearly on the right track: Currently, JAG’s portfolio is 95 percent to 96 percent occupied. MFE