Dive Brief:

• Sumitomo Forestry America, a subsidiary of Japanese conglomerate Sumitomo Forestry Co., completed its acquisition of the operating platform of Dallas-based apartment developer JPI last week.
• The deal, announced in October, makes Sumitomo the fastest-growing developer and second fastest-growing builder in the country, according to the National Multifamily Housing Council. The Japanese firm, which ranked No. 8 on NMHC's Top 25 developer list and No. 11 on its Top 25 builder list, has more than 8,000 homes under construction in Texas and California.
• Sumitomo acquired a 90% stake in JPI’s platform for up to $215 million, according to a Sumitomo press release. CEO Payton Mayes and JPI CFO Mollie Fadule hold the remaining 10%. The developer will continue to be based in North Texas and operate regional offices in San Diego and Irvine, California.
   

Dive Insight:

Although Sumitomo may be more well known for its presence in the single-family business after buying companies like Bloomfield Homes and Brightland Homes, which operate in the Dallas area, the firm has been a player in the multifamily space. 

Through its SFA MF Holdings group, Sumitomo has funded projects by developers such as Dallas-based Trammell Crow Residential and San Diego-based Fairfield Residential. In 2018, the company bought Charlotte-based Crescent Communities’ multifamily, single-family, commercial and mixed-use businesses.

Between the projects started by Crescent and JPI and other developers funded by SFA MF Holdings, the company started 8,118 units in 2022, which would have placed it No. 6 on the National Multifamily Housing Council’s top developer’s list.

JPI currently only develops in Southern California and Dallas, but that footprint was attractive to the Japanese company. “By welcoming JPI to the Sumitomo Forestry Group, the group will strengthen its business base in California, a promising market on the West Coast,” Sumitomo said in its press release.

Despite temporary market challenges, JPI, with the backing of Sumitomo, is evaluating expansion opportunities. It has already moved into affordable housing and is considering expansion beyond its two core markets. 

“We are happy in the markets that we operate in today, but it’s certainly part of our business plan to grow,” Mayes said.

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