Milhaus and SRG Residential Merge, to Acquire LA-Based Investor
The new platform will have a multibillion-dollar development pipeline.
Milhaus and SRG Residential, a subsidiary of Sares Regis Group, have completed a merger to form a national, vertically integrated multifamily platform serving more than 20 markets with a $2.5 billion development pipeline. The new company will also have 50,000 units under third-party management.
The combined company will also expand its investing and lending capabilities by acquiring Broadshore Capital Partners, a Los Angeles-based investment firm with more than $1 billion in assets under management. Broadshore’s client base includes large pension funds, insurance companies and international institutional investors that invest in the U.S.
Milhaus is not disclosing financial terms of either transaction. The Broadshore acquisition is expected to close later this summer. Both transactions come several months after Milhaus acquired ContraVest, an Orlando, Fla.-based third-party property management provider. That deal, which closed in November, expanded Milhaus’ reach in markets around Florida and North Carolina, where it assumed management of eight apartment communities.
Tadd Miller, CEO of Milhaus, told Multi-Housing News that conditions that define the current multifamily market make scale, data and geographic reach more important than ever.
“Margins across the industry are under pressure, and the operators best positioned to perform are those with the buying power, proprietary market intelligence and local expertise to make better decisions faster than their competitors,” Miller said. “The ability to cover geography with genuine local presence, established relationships and team with deep submarket knowledge is no longer a competitive advantage. It’s a requirement for firms managing institutional capital at a meaningful scale.”
Sharing ideas, then agreeing to merge
Miller said that ideas of a merger between Milhaus and SRG Residential began more than 15 years ago, as he and Payne repeatedly found themselves at Urban Land Institute events discussing the challenges of running their businesses. The two men developed a mutual respect and shared perspective on where multifamily development and management were heading. Miller said he also considered the Sares Regis Group founders and leadership team mentors, often exchanging ideas with them long before any formal deal discussions began.
When the companies were considering expansion paths, it became clear that joining forces would prove more compelling than scaling independently and competing against each other. Miller said the combined company “reflects a one-plus-one-equals three outcome” that exceeds what either firm could have built on its own.
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Miller noted that institutional investors, including large pension funds, sovereign wealth funds, family offices and other major capital sources are increasingly drawn to operators who can manage their multifamily allocations across multiple markets from a single, integrated source.
The combined Milhaus company will also be able to take advantage of the current environment with attractive valuations and a cycle that has not yet fully rebounded. Miller said the newly scaled platform is poised to accelerate when conditions shift.
Who’s who at the new firm
Chris Payne, former SRG Residential CEO, joins Milhaus as chief development officer and shareholder. Jeff Bailey, president of property management at SRG Residential, will also be a shareholder and continue to lead the combined operations group.
When the Broadshore acquisition closes, CEO Brad Howe will become chief investment officer and a shareholder at Milhaus. Broadshore principals Russell Munn and James Pomeranz will also be joining Milhaus.
The combined company will have 1,400 employees and will operate corporate offices in Indianapolis, Newport Beach, Calif., Los Angeles, New York, Orlando, Fla. and Phoenix.
Expanding the portfolio and development pipeline
The merger with SRG Residential addsmore than 190 properties and 46,000 units to the third-party property management portfolio and expands the pipeline across the U.S. The combined company is planning eight development projects totaling more than 2,000 units this year.
Two projects are already under construction. Tallevast, a 231-unit Class A community in Sarasota, Fla., broke ground in March, and its first units are expected to come online next summer. Also in March, Milhaus began construction of Mission Beverly, a 263-unit development in Mission, Kan. The Kansas City metro project is slated for completion in early 2028.
The remaining six projects scheduled to begin construction this year are located across several core and expanding markets. Blume at Villages of Mason will add 247 residential units to the Cincinnati market. The firm is constructing 354 units at the Gold Building, an Opportunity Zone development in the Indianapolis market. Other projects include Spanish Oaks in Bee Cave, Texas, with 294 units; Cove Road in Stuart, Fla., with 198 units; and Linwood and Troost, a Kansas City, Mo., development that will deliver 194 units.
