CARROLL Exceeds $2 Billion in Transaction Volume During First Half of 2022
The National Real Estate Firm Looks Back on Its H1 Activity That Included 29 Transactions, 5 Executive Level Hires, 3 LP Deals, and a New Market
Following its record year in transaction activity, CARROLL, a national real estate investment firm, released a report highlighting its dynamic growth and performance in the first half of its eighteenth year.
“I am incredibly proud of CARROLL’s first half 2022 performance as we continue to grow. Transactionally, the momentum we established in Q1 reached new heights in Q2, resulting in $2.6 billion in total transaction volume for the first half of the year,” said Patrick Carroll, Founder and CEO of CARROLL. “We’ve also continued to invest in our platform and people by hiring top-notch talent and improving our competitiveness with enhanced benefits. Additionally, we have been very active in giving back to our communities and causes we are passionate about.”
Transactions and Portfolio Performance
Showing no signs of slowing down after a notable 2021, CARROLL strategically executed 29 deals in H1 – 12 acquisitions and 17 dispositions – totaling $2.6 billion in transaction volume, including an $885.5 million portfolio disposition featuring 12 communities totaling 3,564 units across Florida, North Carolina, and Tennessee. This sale closed out the majority of the remaining assets from a 28-community portfolio – the largest acquisition in CARROLL’s history – purchased in 2017 as the first joint venture transaction between PGIM Real Estate’s U.S. core-plus equity strategy and CARROLL. The additional dispositions from the first half of 2022 included successful exits in top performing MSAs that had been contributing pieces to CARROLL’s recent success.
On the acquisition front, the Firm marked a new investment milestone in Q2 as it completed the acquisition of three wholly owned deals in high-growth Sun Belt MSAs for more than $200 million. By adding the capability to make self-directed investments, CARROLL gains greater investment flexibility and speed to execution in an increasingly complicated market.
Among the LP deals from Q2 was a community in Phoenix, Arizona, which is a new market for the Firm and an additional asset in its growing western U.S. portfolio – following two Las Vegas acquisitions in 2021. The Arizona community, a core/core-plus asset located in one of Phoenix’s strongest submarkets, is seeing substantial population and job growth.
CARROLL’s third-party management business continues to build a sales backlog through strategic partnerships with owners seeking the advantage of CARROLL’s management platform. The Firm negotiated a third-party management deal in Q2 with more than $11 million in capital improvement, including a full demolition and rebuild of a clubhouse with a spacious exercise facility, entertainment center with family-friendly games, a full kitchen, and space to lounge. In the first six months of 2022, CARROLL secured 16 third-party assignments spanning North Carolina (Greensboro), Georgia (Atlanta), and Texas (Austin and Dallas). The Texas assignments showcase the Firm’s familiarity in the state, with multiple communities in Austin and one assignment in the Dallas-Fort Worth area where CARROLL maintains a regional office.
Doubling down on its commitment to platform expansion through the hiring of top talent, CARROLL bolstered its executive team with five new hires in the first half of the year, most recently appointing Rob Lester as CARROLL’s Senior Managing Director of Capital Markets & Investments. Additional executive level hires included Rob Gayle (Vice President of Business Development), Franco Minton (Managing Director of People), Stephen Hendrix (Managing Director of Development), and Sean Griffin (Vice President of Development).
In recognition of the caliber of talent driving CARROLL’s success, Stefanie Bertcher, Senior Vice President of Investor Relations for CARROLL, was selected by GlobeSt. as one of its “Women of Influence” in the Finance Executive category. In support of Stefanie and all women in real estate who are helping shape the industry, the Firm is proud to support this awards event in late July in Park City, Utah.
Focusing on Customer Experience
CARROLL’s consumer facing brand, ARIUM, launched a portfolio-wide singing competition – Sounds of Summer – where ARIUM residents from across the country will compete for a chance to win prizes, including free rent. Each episode of Sounds of Summer, airing on Facebook Live, is hosted by Dave Fenley, a Nashville-based singer/songwriter who competed on both America’s Got Talent and The Voice. He is joined by a panel of celebrity judges who will crown weekly winners as those contestants advance to the semifinals and finale where voting will be opened to fans and fellow residents. By hosting Sounds of Summer, CARROLL seeks to unite and empower residents from across the nation. This contest marks the second time the multifamily brand has organized a portfolio-wide talent competition for its residents.
With its emergence as an industry thought leader and progressive approach to change, the Firm assigned a team to explore the “Future of Work” to address how the company can provide the best customer service against a backdrop of evolving consumer tastes and preferences. The committee, comprised of leaders across the organization, focus on the increasing customer satisfaction through the Firm’s future state operating model. Through a mixture of centralized roles, leveraging technology and updated processes, CARROLL will meet customer needs while also increasing productivity and employee satisfaction.
Through its recycling/trash partner, CARROLL conducted a waste diversion data audit to better inform its goals of waste reduction and increased diversion [recycling] rates. These insights will be used in conjunction with the Firm’s commitment to a 50% waste reduction goal by 2030, with the immediate goal of 5% reduction in waste, water, and energy by 2023, and a 15% annual increase in recycling by 2025.
As CARROLL teams across the U.S. continue to find ways to enhance and increase the on-site experience for customers, the Firm’s portfolio has partnered with Little Free Library to install library boxes at more than 90 ARIUM communities. In conjunction with this portfolio-wide initiative to expand literacy, teams volunteered more than 100 hours to 21 local organizations in support of the CARROLL Community Impact Program, now in its second year, aimed at creating a localized impact around each CARROLL community.
The Firm is proud to continue its nearly decade-long involvement in the Atlanta Food-a-Thon, an annual initiative that donates millions of meals to people in need through the Atlanta Community Food Bank. This community service project, hosted by the Atlanta Apartment Association, is one of the largest food drives in the country. CARROLL began accepting donations at its 20 Atlanta properties in Q2 and will continue to do so until early November.
In June, CEO Patrick CARROLL attended a fundraiser in New York and personally donated $1.5 million to C.A.R.E. for Special Children, a Brooklyn-based nonprofit dedicated to helping families of children with special needs. This donation came on the heels of donating a combined total of $200,000 to the Heart Fund, an international nonprofit focused on fighting cardiovascular disease in developing countries, and Jesuit High School, his alma mater. In addition to being a hands-on CEO, Patrick Carroll prioritizes philanthropic efforts and continues to seek out opportunities to help younger generations succeed.
On a national level, CARROLL will be joining the efforts of the National Apartment Association in July to promote careers within the industry. For the second year, the Firm will be participating alongside other industry leaders across the country for a week-long celebration of employees though a different initiative each day. By leveraging social media, this united effort will help CARROLL and its fellow organizations show appreciation and dedication to employees, while also providing a glimpse into how the real estate industry can be a fulfilling and rewarding career.
Heading into H2, CARROLL will maintain its pursuit of strategic acquisitions across the Sun Belt. This aggressive acquisition approach will drive the capital project spending to levels above those in 2021. With recent migration trends still intact, the Firm remains bullish on the underlying market conditions of Sun Belt cities and predicts those MSAs will outperform their northern peers as people continue fleeing high tax, high cost-of-living states like New York and California. Fundamentally, rents continue to climb across the country as market rate increases counter the decreases in housing supply caused by strong demand. The initial delay and potential overcorrection by the Fed as it relates to interest rates and inflation, in combination with continued supply chain and labor shortages, will likely continue to limit the new housing starts for the next year.
“It is true our revenue growth at CARROLL is among the best we have seen; however, it is also important to understand that while the lack of housing is driving the market rates higher, CARROLL is also reinvesting in its communities and only resetting new rates to full market. We greatly value our residents and a focus on long-term retention through renewals is a core KPI,” said David Perez, COO. “Renter retention remains strong (60- 70%), and people continue to sign or renew leases at a healthy pace.”
The Firm’s ground-up multifamily development venture, re-established in February 2022, features a current pipeline of projects representing more than 1,100 units and spanning three MSAs – Atlanta, Jacksonville, and Orlando. A groundbreaking is scheduled in Atlanta in Q4 with a self-performing team in place to execute the garden-style community. The team remains focused on ready-to-build projects in the Sun Belt as it continues to target a 2,000-unit annual pipeline. While competition remains high, the under-supplied markets CARROLL will focus on provides ample opportunity for continued expansion.
As a Firm with a rapidly growing presence in nine states, CARROLL focuses on fostering a culture of inclusivity, engagement, and philanthropy. In Q3, CARROLL will enhance several employee benefits, including paid maternity and paternity program and a CARROLL Day of Reflection that each employee can use any day of the year for cultural recognition. CARROLL also plans several children’s focused philanthropy initiatives aimed at back-to-school efforts, led by CEO M. Patrick Carroll’s upcoming donation of 600 sneakers to the Boys and Girls Club of Miami.
CARROLL, a privately held real estate company, was founded in 2004. With headquarters in Atlanta, Ga. and regional offices in Dallas-Fort Worth, Raleigh, Denver, Tampa, and New York, CARROLL focuses on multifamily communities, including acquisitions, community and asset management services, ground-up development and fund management. The Firm has raised more than $4.4 billion of equity through CARROLL-sponsored funds and joint ventures. CARROLL has successfully purchased, developed, or sold more than $20.1 billion in real estate.
The company manages more than 30,000 multifamily units across nine states representing $8.3 billion in assets under management and has purchased other multifamily owner/operators throughout the U.S. CARROLL has also developed student housing, single-family residential, and retail communities, and has managed more than $500 million in construction projects throughout the past 10 years. From due diligence to execution, CARROLL has the internal capabilities and the external relationships to identify, underwrite, and close transactions. For more information, visit carrollorg.com.