Tuesday, Jan. 06, 2009

Charleston's Greystar buys rental manager

Charleston-based Greystar Real Estate Partners has acquired a large apartment management firm in deal that makes it one of the biggest companies in its industry.

Terms of the recent purchase of JPI Management Services, a unit of Irving, Texas-based JPI, were not disclosed.

"Although today's economy is tumultuous, we are blessed to be on solid financial footing," said Bob Faith, Greystar's chief executive and a former state commerce secretary for South Carolina. "The combining of the companies is being done with no debt, allowing Greystar to continue to invest in our platform, systems and people and provide an even higher level of service to residents and clients across the country."

JPI Management has 1,150 employees overseeing more than 41,000 rental units in Texas, California, the Northwest, the Midwest and the Northeast. No layoffs are planned.

Previously, Faith said, Greystar's reach as a property manager was limited mostly to southern areas of the United States, from California through the Sunbelt to the Carolinas.

"We think it's an opportunity to fast-forward our business plan to give us complete coverage across all major markets in the country," Faith said.

While it's rough going in the development side of the apartment business, he said, management services remain in demand, especially as more distressed properties are seized by financial institutions.

"That side of the business continues to grow, even in difficult situations like this," Faith said, nothing that rental properties "still have to be managed whether an owner owns them or they go back to the lenders."

He said Greystar also sees the JPI purchase as way to take advantage of the eventual rebound in construction by establishing "underground expertise" for its development business in new markets.

For now, though, building activity in the apartment industry is at a crawl.

"There's not going to be nearly as many new starts ... as in years past," Faith said.

The deal also could open doors for investment opportunities, as Greystar hopes to buy some of the new properties it is overseeing as they come up for sale.

Faith likened the ongoing downturn in commercial real estate to the savings and loan crisis of the 1990s, when valuable real estate assets were changing hands at steep discounts.

"This is starting to feel little like that," Faith said. "We're kind of licking our chops on the investment side."

The JPI acquisition brings Greystar's payroll to more than 4,000 workers. The Broad Street firm now manages more than 140,000 units in 88 markets.

Last year, the National Multifamily Housing Council ranked Greystar as the sixth-largest multifamily property managers in the United States. It's now projected to be No. 5.

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