During an interview, CEO Patrick Carroll stated that the Carroll Organization, which has a portfolio of almost 100 properties valued at approximately $7.4 billion, may be sold in its entirety this year.
Carroll, who established the firm in 2004 and has since expanded it to employ 800 individuals and oversee almost 30,000 units, has enlisted the services of investment bank UBS Group AG to consider a partial or complete sale of the company, with a target closing date as early as this summer. According to Real Estate Alert, Carroll was the first to consider strategic alternatives. Carroll verified the process, which he stated was still in its early stages.
According to the article, it is more probable that potential purchasers will consist of institutional owners, pension funds, or sovereign wealth funds seeking to obtain an operational platform, rather than a multifamily operator seeking to merge with a competitor and possessing greater financial resources to capitalize on the anticipated multifamily turmoil.
Although the Carroll Organization’s floating-rate debt loans pose a challenge for the firm, CEO Patrick Carroll stated that the company has no loans coming due this year and is not seeking to refinance. He explained that his primary objective is to increase the company’s scale, rather than to generate additional funds.
Following the fallout of the recent banking crisis, investors are showing a growing preference for larger multifamily firms over local and regional players. CEO Patrick Carroll noted that when interest rates were close to zero, real estate companies of all sizes could generate profits from apartment transactions.
Although CEO Patrick Carroll has been considering a sale of the company since 2012, the current situation presents an opportunity for the firm to rapidly expand through a potential sale. This is especially relevant given the recent deceleration in asset-level deal activity.
CEO Patrick Carroll has expressed openness to various potential scenarios regarding a sale, such as the complete absorption of the firm into another entity, either with or without his involvement. In addition to investment and ownership, the company encompasses multiple other divisions, including property management and Carroll Nocturnal, a third-party property marketing arm.
Carroll acknowledged that the company is his creation and stated that he would like to remain involved in a capacity that makes sense, with the ultimate goal of ensuring the firm thrives in the next decade.
