In 2023, leading multifamily developer and builder JPI was acquired by Sumitomo Forestry America, a housing and wood products subsidiary of Tokyo-based Sumitomo Forestry Co.
“This partnership not only establishes a resilient structure that supports JPI’s long-term vision and legacy but also involves a significant infusion in JPI’s working capital. This strategic move will tremendously enhance our business plan and drive future growth and sustainability,” JPI CEO Payton Mayes said in December.
JPI retains its brand identity and continues to operate from its headquarters in Irving, Texas. The acquisition agreement includes minority interests acquired by Mayes and Mollie Fadule, who will continue to have leadership positions as CEO and chief financial and investment officer, respectively.
In 2023, JPI started 2,436 multifamily units, ranking No. 22 on the National Multifamily Housing Council’s Top 25 Builders list and No. 23 on the Top 25 Developers list this year.
Fadule discusses what Sumitomo’s acquisition has meant for JPI.
What benefits are you seeing for JPI from the Sumitomo acquisition?
The strategic acquisition by Sumitomo Forestry has significantly enhanced JPI’s financial resources and has opened new capital relationships. The acquisition has enabled us to accelerate our expansion plan into new geographic markets. This is just the beginning of some of the benefits we expect to receive.
Multifamily starts are supposed to be down this year nationally. How will JPI’s starts compare with 2023?
JPI is poised to have a stronger year in 2024 compared to 2023; in the first quarter, we started three new projects. Despite national trends continuing to see slowing starts, our strategic positioning and robust pipeline allow us to continue to grow our portfolio aggressively this year.
With a lot of units coming online in 2023 and this year, how does JPI differentiate its communities?
JPI continues to set the industry standard with our multifamily developments. Whether it’s through our tax credit, workforce, or market-rate segments, the quality and design of our communities stand out in the sector. We’ve observed strong leasing activities in the first quarter of 2024, which affirm the distinctiveness and appeal of our properties.
In addition to luxury, JPI has a focus on affordable and attainable housing. Why is it a priority for JPI to create this housing?
JPI is deeply committed to addressing the national housing crisis by developing high-quality, accessible housing for individuals across all income levels. We currently have eight affordable housing projects under construction in the Dallas-Fort Worth area, with plans to launch a number of additional projects this year. These projects will provide vital housing for elderly/active adults (55-plus) as well as families in the metroplex, creating thousands of affordable units. Our units serve households earning from as low as 30% of the area median income all the way up to market-rate with garden-style and townhome products. Our mission to impact housing extends to our Southern California business, where we integrate affordable homes into our projects. Our commitment is not just about fulfilling housing demand; it is about enhancing communities and impacting lives.
What are the biggest challenges on the development side today?
Currently, the most significant challenge we face is navigating the capital markets. The rising cost of capital and shifting investor priorities pose challenges, but they also sharpen our focus on optimizing resources and enhancing operational efficiencies.
We are excited about our current pipeline and the ability for JPI to capitalize on the significant reduction in starts in 2023 and 2024.
Where are you seeing opportunities?
Despite these challenges, opportunities abound for JPI to leverage technology and streamline operations. Our recent move to incorporate in-house design and invest in innovative technologies is already yielding improvements in our project execution.
These strategic initiatives not only reduce costs and project timelines but also enhance the overall quality of our developments.
