CAS Riverstone, formerly known as Riverstone Residential Group, in April acquired Woodland Hills, Calif.-based Stratus Real Estate for an undisclosed price, which brings Riverstone's fee management portfolio to 120,000 units throughout 625 properties. The acquisition helps the growing Riverstone dramatically increase its presence in two major markets: California and Arizona. (Stratus manages 23,000 units throughout those states, plus Hawaii).
“We are just not going to be big for big's sake,” says Terry Danner, co-CEO of CAS Riverstone, which is one of the largest fee management firms in the country. “We want to have a presence in markets that we view as key ones where we want to be in the future.”
For Stratus, the deal brings the power of size—and all of its efficiencies. “I believe in the bigger concept at play here, consolidation,” says Steve Heimler, CEO of Stratus, who will be a part of Riverstone's senior leadership group. Perhaps the biggest gain: back office efficiencies. “This business has way too many people spending too much money on backroom services,” says Heimler. “This is a way to solve that by assembling enough units so you can afford truly the best backroom services available.” The company's back office services, including accounting, human resources, and IT, will now be centralized with Riverstone's operations, but Stratus' property operations staff will stay in place.
Heimler says he's ready to take his company to the next level. “In my view, it's not so much that I have given up my baby; my baby has graduated college and is ready for the big leagues.”