Private Equity Firms Buying Property Management and HOA Management Companies

Community association and property management companies have become one of the steadiest targets for private equity. The appeal is easy to see from a buyer's side: management fees are paid every month under multi-year agreements, the work is essential, and the market is made up of thousands of local and regional firms. A buyer that owns a platform can add a well-run local company, keep its managers and its clients, and move the accounting, technology and insurance programs onto one system.

Most buyers in this space fall into two groups. Platform buyers are private equity firms that own, or want to build, a large management company and grow it through acquisitions. Add-on buyers are those platforms themselves, which buy smaller firms in new markets or next to existing branches. For an owner of a company with a few thousand doors, the likely buyer is a platform looking for an add-on rather than a firm making its first investment in the sector.

Size is usually discussed in doors or units under management, monthly fee revenue and EBITDA. Buyers look closely at how long associations have stayed, how many contracts come up for renewal in the next year, how many doors each manager handles, the mix of management fees and ancillary revenue such as maintenance, resale documents and compliance work, and whether the company is licensed where state law requires it. They will also ask how association funds are held, because that money belongs to the associations and not to the company.

For an owner, the practical questions come early. Will the buyer keep the brand and the managers your boards know? Do your management agreements need board approval to transfer? How will a change in software or banking land with clients? Firms that have bought many management companies usually have good answers, and the profiles below show what each one has bought recently.

Greymont works with buyers in this sector and is paid by them, never by the owner. If you are thinking about a sale, even years from now, we can tell you which of these firms fits your size, your markets and your goals.