Charleston, S.C.-based Greystar Real Estate Partners has nabbed a spot as one of the country's largest property management firms after announcing this week that it has acquired the management division of Irving, Texas-based JPI. The acquisition is the second business unit divestiture at JPI in the past two weeks.
The JPI management portfolio, which includes more than 41,000 units across Texas, California, the Pacific Northwest, the Midwest, and the Northeast, gives Greystar a national footprint in 88 metro markets and boosts its units under management count to more than 140,000. That unit count will likely rank the firm as one of the nation's three largest property management companies. As part of the deal, all 1,150 JPI Management Services associates will become members of the Greystar team.
"We are really pumped," says Greystar chairman and CEO Bob Faith. "This rounds us out in every single major market in the country, and, from those toeholds, we hope to grow. Our goal before this transaction was to have a presence in every major market, and now we have had to upgrade that goal to be the No. 1 or No. 2 [property management company] in those markets."
The deal signals continued divesture activity at JPI over the course of recent weeks. On Dec. 29, Carrollton, Texas-based multifamily technology products and services provider RealPage acquired the JPI Resident Solutions team of multifamily technology advisors, led by industry veteran Henry Pye.
The tech team will continue to offer multifamily clients technology consulting and project management services. "I was always impressed with RealPage and how they looked at things from a value perspective," Pye says. "That has always been our focus from when the partners at JPI asked me to move into this role six years ago-to assist owners with attaining the best risk-adjusted return through resident services and technology."
Likewise, Faith notes that a shared focus on service quality and performance should make for a smooth transition process for associates. "We're hopeful we will have some economies of scale, but out on the front lines with the clients, there are really no changes," he says. "One thing we do that has been responsible for our growth is a heavy investment in [market area managers], and I see us continuing to invest in that."
Faith says that the debt-free Greystar did not have to borrow any capital to complete the deal but would not otherwise divulge the financial terms of the acquisition. "Maybe we got knocked in the past for not growing quickly in the go-go-go times," he says. "But it feels good now to not be sweating any bullets on debt coming due."
In a statement, JPI said that the company currently operates a portfolio of real estate assets that include 45,000 units across more than 145 properties and noted that the company's regional acquisitions, development, and services teams continue to oversee the financial, operating, and construction activities associated with all of these assets.
"JPI will continue as the owner/operator of a $2 billion portfolio of Class A apartment communities," JPI president and chief investment officer Robert D. Page said in the statement. "The sale of the property management company to Greystar provides the best opportunities for our people, who will continue to manage our real estate assets. Greystar is a great company with the right culture and growth opportunities for our people, and they will bring additional value to our real estate investors."
JPI did not respond to requests for additional comments on the potential for disposition of additional assets or the market conditions that necessitated the divestiture of its fee management and technology services units.