BlackRock Realty Signs Riverstone Residential to Manage 62-Property Portfolio

By Teresa O’Dea Hein, Managing EditorDallas—BlackRock Realty Advisors, Inc., the real estate equity arm of BlackRock Inc., has engaged Riverstone Residential, a CAS Partners company, to manage its portfolio of apartment communities. Located in a variety of markets in nine states, the 62 communities in the portfolio represent more than 15,000 units and are Riverstone’s largest outsourcing agreement to date. Previously, these communities were managed by Metric Property Management Inc., a wholly owned subsidiary of New York-based BlackRock Realty Advisors, one of the world’s largest publicly traded investment management firms. Today marks the final stage of the management transition, which occurred in three phases over the last six weeks.“When you have as large a footprint as ours, with 30 offices across the U.S., you’re set up to easily handle that type of transition,” Christy Freeland (pictured), CEO of Riverstone Residential, tells MHN.In the last two and half years, Riverstone has integrated the portfolios, employees and resources of six regional management companies. In order to provide operational continuity for the residents and clients of BlackRock, Riverstone offered positions to the employees of Metric. Riverstone has increased its portfolio by 276 percent through client development and strategic company acquisitions since 2005. Riverstone is the largest privately held residential management company in the U.S., with a portfolio of assets valued at more than $25 billion.“Our primary objectives in the selection of Riverstone were to provide stability to our portfolio throughout the transition and take advantage of Riverstone’s value-added strategies and economies of scale to continue to provide favorable returns to our clients,” says Ron Zuzack, managing director and head of U.S. Real Estate Equity for BlackRock Realty Advisors Inc.   “Riverstone and BlackRock share a strong client focus and a commitment to maximizing the financial returns of our clients’ assets,” Freeland points out. During a softer economy like the current one, when rent increases are harder to get but expenses continue to rise, Freeland believes that property owners will be looking more closely at their management companies. Since third-party management firms can offer purchasing efficiencies and management expertise in a number of fields, she expects that more owners will evaluate these services.The key to successfully integrate different groups of employees is, Freeland notes, “communicate, communicate and then communicate some more, even though you think you’ve already communicated enough. And we’re not silly enough to think that we have all the answers so we compare the best practices of each firm to see what we can adopt.”