Multi-Housing News: At the start of the current industry cycle (2009/2010), we began to see a meaningful consolidation of management platforms. It started with Riverstone Residential acquiring several regional operators, and later became an industry game changer with the 2014 merger of Riverstone and Greystar.
From the vantage point of the big national operators and supporters of the consolidation efforts, the marriage of Greystar and Riverstone was a defining moment. It would certainly make sense under the premise that size, scale and the implementation of new technologies would lower overall cost, increase efficiencies and create a “win-win” for all parties involved (operators/property owners /etc.).
As an experienced and tenured regional owner/operator, we watched these massive market changes and began to wonder where all of this was going. What would be the result of this seismic shift? How would the competitive landscape change? Would regional operators be swallowed up as rapid consolidation continued?
While we don’t have the hard and fast data on hand, it certainly feels as though there are fewer operators then there were five, 10 and even 20 years ago. This landmark deal solidified the industry’s trajectory as Greystar pulled ahead of the pack to quickly become the world’s largest multifamily real estate services company.
Successfully Navigating Seismic Shifts – While we were confident that the same ingredients that ensured our past success would allow us to prosper in the future, the outcome of the consolidation was uncertain. Now that we are several years down the road, the irony is that this particular “disruption” has proven to be beneficial and even provided a competitive advantage for our company, as well as numerous other regional operators.
For example, a common theme we hear among many owners is that, while they recognize the advantages in size and scale of the large operators, and certainly appreciate some of the benefits, they fear “getting lost in the sea of client relationships” and often crave a higher level of customer service and one-on-one support. Being a valued customer who maintains a directly line of communication with company decision makers becomes even more difficult in the creep toward the commoditization of the business.
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