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M&A Services for Property Management
The property management industry typically is resistant to downturns in the economy. When America’s economy is in trouble, consumers and lenders are cautious and homeownership rates tend to decline. This stimulates demand for rental housing and property management. Conversely, when the economy booms, the demand for rental housing decreases as home ownership seems more in reach for more people, but commercial property becomes more important.
However, the market was not typical during the COVID-19 pandemic. What happened in 2020-2021 was the opposite of the ordinary patterns. Government intervention both in economic stimulus and regulation of standard property management activities have added additional complexity.
Small independent operators form a strong majority of the property management industry. Low barriers to entry and low capital costs make it easy for small operators to enter the marketplace. However, strong local contacts and knowledge of local markets give an advantage to exiting property management businesses.
As a result of all these factors, the benefit of professional representation for sellers of property management businesses has never been greater.
Investment Banking Services
Exit Strategies Group provides sell-side merger and acquisition (M&A) advisory / investment banking services to company owners looking to sell or bring in an equity partner. Our automation team is led by Al Statz, who has 15 years of automation industry operating experience and 19 years of M&A experience. Few investment bankers have stronger automation industry relationships and knowledge.
What we do:
- Understand your personal needs, goals and priorities
- Evaluate your company’s market value, transaction readiness and strategic alternatives
- Help prepare your company for a sale or recapitalization (or acquisition*)
- Prepare a compelling confidential offering memorandum
- Identify and contact multiple buyer candidates
- Generate interest and orchestrate a competitive bid process
- Negotiate the best possible deal terms for you and your stakeholders
- Guide you and your team through the due diligence and closing phases of a transaction
*Buy-side services include validating your acquisition strategy, finding and selecting target companies, approaching and screening candidates, identifying synergies, valuation, negotiating a letter of intent, introducing debt and equity providers, and guidance through the diligence and closing process.
Property Management Outlook
Home ownership is projected to increase over the next five years, reducing demand for residential property management services. Office vacancy rates are expected to decline only slightly over the next five years, leading to industry revenue increasing only at an annualized rate of 1.1% over the five years to 2026. As companies hesitate on renewing long-term leases amid the pandemic, industry operators are expected to lose potential revenue. Overall economic conditions have decreased industry profit over the five years to 2021. Still, more operators have entered the industry. The number of industry enterprises has increased at an annualized rate of 4.0% over the five years to 2021. Remote work is expected to continue following the coronavirus pandemic, and office rental vacancy, which spiked during the pandemic, is expected to decline at an annualized rate of 3.0% over the next five years. While nonresidential construction is still expected to grow, businesses now more than ever are hesitant to sign long-term lease agreements. It is likely that increased competition from real estate brokerages, agencies and investment trusts will squeeze profits.
“Your team quickly grasped our company and its potential value. Our entire family is thrilled with the outcome of the transaction and the level of service you provided. I always knew you had our goals and interests in mind, and I am convinced that we could not have achieved the same price and terms without your counsel.”
“Exit Strategies’ guidance throughout the complex sale process was invaluable to me. Their advice was consistently accurate, and complemented that of our attorney and our CPA. … Having experienced the level of service and counsel that AI Statz and Exit Strategies provide, I cannot imagine selling another company without this service. I wholeheartedly recommend Exit Strategies Group to anyone looking to sell or acquire a company.”
Charles (Chip) Trimmier, M&A Advisor and Property Management Team Leader, (650) 447-9385