Dive Brief:

• Pure Property Management has launched Pure Institutional Management, a division dedicated to institutional investor clients and their residential portfolios across multiple locations.
• Los Gatos, California-based Pure launched in 2020 and now manages more than 15,000 single-family residences in over 50 cities and metropolitan areas within 16 states. Its clients include individual and institutional investors.
• The company expects to operate in 25 states by the end of the year. It recently closed a $50 million financing round to help fuel acquisitions of independent property management companies across the U.S. 

Dive Insight:

Before the global financial crisis of 2007-2009, single-family rental ownership was largely the domain of small, local mom-and-pop organizations or individual landlords. But after the market tumult in the late 2000s, large institutional firms like Blackstone and American Homes 4 Rent purchased blocks of single-family homes to lease.

As more institutions entered the market to both buy and build single-family rentals, the need for professional management has increased. Though consolidation has occurred, the management market is still fragmented.

By launching its institutional platform, Pure thinks it can better meet the needs of those large investors. While most of its clients are smaller companies, Joseph Polverari, Pure’s co-founder and general manager, told Multifamily Dive that he sees institutions buying larger numbers of homes.

“[Institutions] tend to have different expectations from a financial reporting perspective than most of the smaller landlords that we manage for,” Polverari said. “We’ve been spending time the past 18 months understanding what their needs are from a reporting and analysis perspective.”

More acquisitions ahead

On average, Pure is buying management companies with five or six employees and more than 300 properties. It will target firms as large as 20 or 30 employees, however. The company has completed 35 acquisitions, averaging around three a month.

“We will stay on that pace for the foreseeable future, and we've got the capital profile to do it,”  Polverari said.

By incorporating its technology, Pure can squeeze efficiency out of the companies that it acquires, according to Polverari.

“Most of the companies that we acquired have between six and 10 different IT systems and the interfaces between them are human beings,” Polverari said. “It causes them literally anxiety to keep up with managing all those systems and doing all those different things. And so what we have created at the foundational level is a way to overlay those systems and to orchestrate workflow.”

Pure’s $50 million financing round gives it fuel for more growth. The funding is intended to help the company accelerate acquisitions of independent property management companies across the U.S. It is eyeing entry into markets like Portland, Oregon; Nashville, Tennessee; and Salt Lake City.

Above all, Polverari said people drive Pure’s acquisition targets. It wants to buy companies with strong teams. After that, it focuses on growing markets.

“Where do we think the next great metropolitan areas in the nation are going to continue to thrive?” Polverari said. “For us, it's a combination of a mature industry, a university and mature or emerging tech [companies]. We look for those three features and we plan our acquisitions accordingly. But very much it is people first.”

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