South Carolina-based Greystar manages more than 187,000 apartments in the United States, making it the biggest manager of rental units in the country, and yet it has barely made a mark in the Washington area.
That is beginning to change.
The company is making a push into the mid-Atlantic and the northeast, and Washington is one of its top targets. As a manager, Greystar now operates 29 apartment properties totaling 11,335 units in the Washington area. The local portfolio includes properties on which Greystar has been hired to oversee and others the firm has purchased itself, including a 308-unit complex in the Fort Totten neighborhood of Northwest D.C. and a 397-unit complex in Silver Spring.
As a developer, Greystar is teaming with the Georgelas Group to build a 25-story, 400-unit apartment tower in Tysons Corner, and it has four other properties in suburban Maryland that Kevin Sheehan, Greystar managing director for real estate, says it is securing as development sites.
The company has more than doubled its Tysons office to 20 people, bringing Senior Director Brett Lashley from its Charleston, S.C., headquarters and Senior Managing Director Debbie Webre from Houston. The company plans to move into 7,500 square feet of new space in Tysons soon, part of an effort, Sheehan said, to, “create a major office for Greystar in our nation’s capital.”
The foray is the biggest since the company acquired JPI Management Services in early 2009; before the JPI deal Greystar had little presence in the Washington area.
The company’s entry into the market coincides with a surge in interest in apartment development across the region. As out-of-town apartment developers enter the Washington market they are often hire established national property outfits such as Greystar and Bozzuto to manage their new properties. The winners are likely to be those who keep occupancy rates high and retain tenants — a job that could grow more challenging as new projects come on line.
Sheehan said the increased interest has provided openings for Greystar to take over management of buildings that could be rehabbed or repositioned to seek higher rents.
A case in point is the 308-unit apartment complex in Fort Totten that Greystar acquired in February. Built only three years ago, the complex is on the doorstep of a Metro station (Fort Totten) that three train lines service (Red, Green and Yellow).
But the project, developed by Clark Realty Capital in partnership with the Washington Metropolitan Area Transit Authority, has been criticized for its design and attracted only a 7-Eleven store to its retail space.
Once Greystar acquired the complex it began making upgrades and aggressively seeking a coffee shop to fill the remaining retail space. Lashley said that apartment renters in Washington covet common space with wireless Internet and coffee and are willing to pay higher rents to have it. “People are coming home from work, they’re putting down their briefcase, and they’re going downstairs to be around other people that they live with,” he said.
Greystar also changed the complex’s name from Fort Totten Station to Aventine Fort Totten; Sheehan said Greystar used the “Aventine”name to convey a more upscale location, though he did not know what the word meant. (It is the name of one of the seven hills that ancient Rome was built upon.) Greystar also has branded complexes in Silver Spring, Stafford and Atlanta with the Aventine name.
With the changes, Sheehan said Greystar took the Fort Totten property from 88 percent occupancy to 96 percent. Sheehan said it provided a model for what Greystar would like to do elsewhere in the market, either as an owner or manager for other owners. “This is working in the Washington, D.C., market because investors can buy those buildings, do those improvements and get paid for them in increased rents,” he said.