McLean, Va.-Kettler has been a major player in the Washington, D.C., multifamily market for a while. Now, it’s hoping that an alliance with Santa Ana, Calif.-based Grubb & Ellis Co., a real estate services and investment firm, makes it a brand name in new markets. The alliance, known as Grubb & Ellis|Kettler Residential Management, will allow the firms to work together seamlessly when a property owner requires both residential and commercial property management services. Grubb & Ellis will coordinate marketing efforts, streamline suppliers, and interconnect technology systems. Kettler, however, will not be managing any properties for the Grubb & Ellis Apartment REIT, which has been an active buyer recently.

In many ways, the partnership will help both companies. Like a lot of firms, Grubb &Ellis is growing its financial services and asset management practice, which provides leasing, receivership, management, and disposition services to financial institutions and special servicers with distressed assets. And Kettler has been looking for new ways to expand its platform and enter new markets.

Cindy Clare, president of Kettler Management, took some time to talk with Multifamily Executive senior editor Les Shaver about what the alliance means for her firm.

MFE: What does this alliance do for Kettler?
The benefit to Kettler is that it gives us an opportunity to grow into more markets. We have been expanding out of this area. This gives us a platform to do that and, more importantly, it gives us a support base because it gives us Grubb & Ellis' offices to work with in new markets. It opens up markets for us that we would not have looked at.

MFE: How many units will this add?
It’s a moving target. At the moment, we don’t know. We think there’s going to be a lot of opportunity on both sides. But it’s still new, so we’re starting to market and see what interest we get. Give me a couple of months, and maybe I’ll have a better idea.

MFE: In the past year, we’ve seen a number of management companies grow very quickly. Does Kettler want to follow that growth?
We’re providing a service. One of the things companies have done is grow by buying up other management companies. That’s not what we’re looking to do right now. With the alliance, we think it’s about creating a little bit of a different market for people without having to create a whole new division.

MFE: Does managing assets in special servicing concern you because it’s a not a long-term commitment?
CLARE: There’s always that risk in the third-party business, even when you think you have a long-term thing. Somebody sells the building, and you could be out. The reality is that, with the special servicers, their goal is to get those properties stabilized and off their books. That means they may sell them to somebody who may not need management. So yes, you may lose some of them. But you may be able to maintain some of them if you’ve been able to turn that property around and are managing the property well. We look it at that way.

MFE: Is special servicing a large enough opportunity for you to manage more units?
CLARE: [The special servicing arena] is probably where we see more opportunity right now.  Clearly, in the Washington, D.C., market, there’s not a lot of that opportunity. But in some other areas, we have not seen that.

MFE: Have you done any special servicing management in the past?
No, but that’s where the Grubb & Ellis alliance makes a lot of sense for us. They have the experience with the special servicers. We have the multifamily experience that they don’t. By aligning those expertise, we’ll be able to provide clients with everything they’ll need.