Charleston-based real estate investor, manager and developer Greystar is seeking to expand its commercial real estate platform and has created an office of the chief investment officer as it works to grow its credit investments and broader real estate investment activity.
“We are very focused on growing our credit business, because we see the opportunity set for private credit growing and it’s a natural evolution of our platform,” Wes Fuller, chief investment officer, told Real Estate Capital USA.
The firm is looking to attain and build market share in the housing sectors, specifically with the use of its existing private credit investment capabilities. It is also hoping this broader platform will allow it to further expand its investor base globally.
“We can underwrite large volumes of real estate and counterparties efficiently, given the depth of data, our teams and our relationships in the industry,” Fuller said, adding he hopes other market participants see Greystar as a knowledgeable, efficient, friendly and transparent lender as a result.
Greystar is moving to expand its market share in the debt markets at a time when the commercial real estate private credit sector is growing. To date, the firm can originate whole loans, construction loans, mezzanine debt or other subordinate debt across a capital stack. Greystar has notably participated in Freddie Mac K Series deals too as part of its multifamily investing.
“We are unlikely to provide capital that Freddie [Mac] or Fannie [Mae] would otherwise provide and so the whole loan of a stabilized multifamily building is unlikely to be where we will spend a lot of time,” Fuller said. “It will really be in other situations where private credit opportunities will be more plentiful.”
Refinancings, as one example, are one area where Fuller said the firm is having a lot of conversations about how the firm can deploy capital. “We are already active in the credit space and will continue to target a wide range of credit opportunities,” he said. “It is scaling fairly quickly because of the growing opportunity.”
Fuller noted the firm will be basing its approach on the same methodology used in Greystar’s equity investments. “We are really going to focus on known and trusted borrowers, detailed underwriting of the underlying real estate, and utilize our knowledge, our speed, and the ability to be nimble to hopefully be a preferred lender in the credit space,” he said.
The firm is not looking to be transactional with its debt market growth. Fuller said Greystar will not typically participate in a deal that effectively acts as a short-term trade.
“The next 24-36 months are going to be really interesting,” he noted. “We believe that as interest rates reset and the regulatory environment of banks change, a lot of private credit lending opportunities are being created in the short term which is driving our growth in the space.”
Fine-tuning team focus
As Greystar has grown its vertically integrated real estate platform over the last 30 years, Fuller said the firm has found increasing levels of value with investors when it can be a stable operating partner or general partner on a given portfolio or asset across geographies.
This value extends from Greystar’s core living asset classes – multifamily, single-family rental, active adult and student housing – to other investment focuses such as logistics and life sciences. For sector-specific growth opportunities, Greystar is looking deeper into housing sub-categories including student housing, single-family rental and the build-for-rent space.
“What makes this platform really powerful is that it operates with the same core values, the same principles, the same best practices, the same defined terms, same calculations and most importantly, it operates with the same culture,” Fuller said. “That consistency of execution, process and deliverables is incredibly important, which is how we drive our global investment strategies through the office of the CIO.”
Greystar’s office of the CIO will work closely to fine-tune each regional business across 144 strategic markets. To do this, the firm is carving out a strategic partners program headed up by senior managing director of investment management John Molster and managing director for Greystar’s investment management business Christie Wootton, who also oversees US separate account portfolio management.
“How we approach our investing is very strategy-led and the strategies are formed by the immense collection of data we have as a large organization that manages and operates and builds lots of properties in lots of geographies,” Fuller said. “We have a lot of market intelligence – with our teams on the ground and the large portfolio we manage – and that information gets fed into the creation of data-driven investment strategies.”
Those strategies, Fuller said, represent where the firm believes its greatest opportunities and highest convictions are especially for capitalizing and structuring investments in equity or debt.
Following the global financial crisis of 2008, Fuller said the firm has evolved to expand its expertise across the living sector so that prospective residents at any stage of their career or life are covered by Greystar’s housing portfolio.
The strategic partners program will comprise a specialized team to oversee and manage Greystar’s relationships with its largest current and prospective investors. Additional team responsibilities and assignments include Jen Ciullo and Rachael Britting heading up investor relations, Michael Joyce leading research and strategy and Clay Wolford heading up special situations.