If you call yourself The Milestone Group, then setting and reaching Olympic-sized goals must be par for the course. And indeed, the Dallas-based investment firm takes its name seriously. It aims for a target few companies can reach: to be recognized by its peers as one of the top 10 multifamily firms in the country. Milestone doesn’t want to be highly regarded for its sheer size—nearly 28,000 units and counting—but also for its speed of deal execution and investment prowess. It’s a lofty ambition, but company executives say the goal is well within reach.
“If you look at our performance and our track record for the last three or four years, I think we can say that we are there,” says Jeffrey Goldberg, managing partner of The Milestone Group. Goldberg states this modestly, yet confidently, as two other top company executives—Robert Landin, managing partner, and Steve Lamberti, president and COO of Milestone Management—nod in agreement.
While there is no actual top 10 list, the three men eagerly point to their past performance to show they are a force to be reckoned with. In its four short years of existence, Milestone has acquired approximately 28,000 apartment units and garnered national attention for its value-add strategy of acquiring and renovating Class A- to B properties in Sun Belt states. The methods have proven successful, as the firm brings top-dollar returns to its investors, which include major financial institutions, high-net-worth individuals, and public and private pension funds.
Want more evidence? Just listen to what Milestone’s peers have to say. “Jeff and Rob are the cream of the crop when it comes to dealmaking, and Steve is the cream of the crop when it comes to apartment management, including the underwriting of acquisitions and hitting aggressive budgets,” says Spencer Stuart Jr., a regional partner at Foster City, Calif.-based Legacy Partners, for which Milestone manages more than 3,000 units.
The company credits its achievements and rapid growth to a vertically integrated structure where all the work—from financing to property management and construction services—is done in-house to maximize efficiencies. “We have developed an empowered entrepreneurial organization that has all of the sophisticated tools to not only implement and execute its strategies but to provide the highest level of service to its investors,” Landin says. “Usually, an operating partner is good at operating an asset but does not have the capital markets or investment management expertise. Milestone has all of those skill sets in-house.”
The company must be doing something right; the capital from investors is flowing despite tenuous market conditions. “Milestone delivers very good financial results to their capital partners,” says Greg Kraus, a partner of acquisitions at Dallas-based Invesco Real Estate, which has invested approximately $1.25 billion to date with Milestone. “They are looking to take advantage of evolving capital market trends, and they have capitalized their assets very conservatively and have tremendous staying power and strength in their ownership structure.”
Milestone’s growth story is one for the books—consider that last year alone, the firm grew its unit count by 25 percent and expects to repeat (even increase) that percentage over the next two to four years. Without a doubt, Goldberg and his team are poised to make the leap into being a formidable national player: Today, the firm is armed with more than $600 million in buying power.
EARLY MILESTONES Earning top 10 status wasn’t first on Goldberg’s mind when he formed the company in 2003. At that time, he simply sought to operate as a small opportunistic investment shop. He had spent the prior 14 years running Insignia Financial Group’s private equity arm, the Co-Investment Group, where he headed up co-investment joint venture acquisitions, tender offers, and portfolio purchases. Goldberg decided to launch his own company when Insignia merged with CB Richard Ellis in July 2003.
For Goldberg, the timing was right to strike out on his own. “There is something very empowering about being in control of your own destiny,” Goldberg says. “I spent 14 years at Insignia, preparing for this very moment. I basically said to myself, ‘I have overseen asset management, acquisitions, and corporate acquisitions, and now is the time to take the plunge.’”
The big move came as no shock to his former boss at Insignia, Frank Garrison. “He was allowed a large amount of freedom and the ability to utilize his entrepreneurial skills at Insignia, so it didn’t surprise me at all that he wanted his own gig,” says Garrison, now CEO of Ft. Lauderdale, Fla.-based Global Yachting, which owns and operates marinas.
