Greystar Real Estate Partners, the largest operator of rental apartments in the U.S., is acquiring the property management business of Alliance Residential Co., a deal that will boost its portfolio by 130,000 units. The transaction comes as the multifamily industry powers through the coronavirus crisis and the overwhelming majority of people living in professionally managed communities continue to make rent payments.
Financial terms were not disclosed, but Charleston, S.C.-based Greystar paid nearly $200 million in cash for the Alliance business, according to a Wall Street Journal report citing unnamed sources. The National Multifamily Housing Council ranked Alliance as the country’s largest apartment developer and fourth-largest apartment manager.
The company’s portfolio spans more than 500 Class A multifamily properties with nearly 130,000 primarily Class A units across 21 states. Alliance will continue to focus on development, construction and acquisition in the multifamily sector, including workforce and senior housing properties. Going forward, Greystar will provide management services to the company’s acquisition and development business as part of the deal.
The acquisition will expand Greystar’s footprint by roughly one-quarter, strengthening its presence in key western markets including the San Francisco Bay Area, Los Angeles, Las Vegas, Phoenix and Denver, as well as the Northeast and Pacific Northwest regions. Greystar’s team will grow to almost 19,000 staff, with a total portfolio of more than 2,400 apartment communities and 660,000 units across 42 U.S. states and 13 countries.
Andrew Livingstone is executive managing director in charge of Greystar’s Property Management Group. Bradley Cribbins has served as president & CEO of Alliance’s management division since 2018. Greystar declined to comment about whether the acquisition would bring any changes to senior management.
Negotiations between Greystar chairman & CEO Bob Faith and Alliance chairman & CEO Bruce Ward reportedly began in February, before coronavirus turned into a major health crisis in the U.S. Greystar moved forward with the deal in recent weeks at the previously agreed piece, despite having the opportunity to back out, because of its confidence in the long-term strength of the rental apartment industry, according to the Wall Street Journal account.
NMHC’s survey of 11.4 million professionally managed apartment units across the country found that 93.3 percent of apartment households made a full or partial rent payment by May 27.