The nation’s largest property management company lost out on a handful of contracts in Salt Lake City in recent weeks, including on a noteworthy building that investors are keeping a close eye on.
Among the buildings no longer managed by Greystar is Worthington Tower, a new residential high-rise with 359 units that was recently completed and is undergoing lease-up.
Greystar and others confirmed the news of the change, which the company itself compared to a baseball pitcher being relieved after a strong start.
“Like a pitcher being pulled in the 7th inning, we would have preferred to see this to completion,” said Bill Prince, senior leader for Greystar in Utah.
“We gave this amazing building a strong start in the Salt Lake market and expect the community to have continued success. We hope to continue our relationship with Convexity in the future.”
Greystar, which is credited as by far the largest property manager in the nation with nearly 1 million units under management, worked for the Chicago-based Convexity on the Worthington for over two years, Prince said.
The building is now managed by a Texas-based property management firm that landed the Worthington contract along with a handful of other newly built apartment buildings across the Wasatch Front as it entered the market.
Kairoi Residential is now the property manager of the Worthington, as well as other buildings developed or owned by Cole West and Urban Alfandre.
Kairoi Residential declined to comment for the article.
It’s not clear how full the Worthington is today. But the building is considered one of two bellwethers that will show if there’s a broader market for high-end high-rise living in Downtown Salt Lake City.
The other, Astra Tower, is being leased up in phases as its upper floors are still being completed.
One onlooker estimated Worthington was around 60 percent leased.
Convexity, the developer of the Worthington, didn’t respond to requests for comment. But a neutral observer who spoke on the condition of anonymity underscored the importance that the building reaches full occupancy.
“It is extremely important to lease these buildings up in a timely manner,” the person told Building Salt Lake.
“I can understand the frustration that Worthington’s ownership is feeling if they expected leasing velocity to be greater.”
Kensington Investment Company, the Boston-based developer behind Astra Tower, has more holdings around the Downtown area and is said to be eyeing lease-up activity at Worthington and Astra to decide whether to build more supertalls in the future.
The buildings are considered an entirely new product for the capital city, ones that might be as familiar to high wage earners relocating from coastal markets like New York, Boston, and San Francisco.
“Rest assured, other developers who are considering this type of product are watching the Worthington and Astra with much interest,” the observer said.
Kairoi enters the market
It’s not immediately clear what led the investors to part ways with Greystar, though it appears investor concerns weren’t limited to lease activity.
Cole West CEO Darlene Carter said her firm, which advertises on Building Salt Lake, helped bring Kairoi to the market, hiring the company to manage a pair of Downtown buildings—the Randi and the Beverly—as well as the Pearl in Daybreak.
“Since then, we’ve expanded the partnership to include two Salt Lake City build-to-rent communities—The Quinci and the newly launched Yard,” Carter said.
“Most recently, we moved Block 44 under Kairoi’s management, a strategic decision made to streamline operations across our downtown portfolio.”
Carter noted that Kairoi’s presence would allow them to expand across Utah.
Stephen Alfandre confirmed to Building Salt Lake that Kairoi is now managing the newly built apartment buildings known as Slate and Sloane, near the Central 9th neighborhood.
“We think very highly of Greystar and will continue to do lots of business with them,” Alfandre said.
“Sloane and Slate will both be managed by Kairoi but unlike Worthington, Slate and Sloane are already stabilized. As Salt Lake grows as a market there will be more competition for property management services which is an overall good thing for everyone.”
Others suspected that Greystar grew too quickly and wasn’t able to provide hands-on service that can be even more important as investors compete to fill buildings with renters amid a rush of new supply.
Regardless, several people stressed the importance of high-end service for luxury apartments, where client expectations are high.
“While selecting a top tier property management company is important, what is more important is the on-site person,” said Kip Paul, vice chairman of investment sales for Cushman & Wakefield, which is a competing property manager but not active in the Salt Lake market and while speaking generally about the sector and not specifically about Greystar.
“A great on-site property manager will set the tone for the project. It is important they treat residents as customers. Remember their names, be responsive to their needs, ensure the property is meticulously maintained.”
Another onlooker who spoke anonymously stressed the importance of local service.
“When it comes to a third-party management company, sometimes there is no advantage to being the 800-pound gorilla,” the person said.
“It really comes down to the local on-site team. With these buildings, it’s crucial that you have an experienced lease-up manager to guide the team on site.”
image source from：https://buildingsaltlake.com/greystar-loses-out-on-a-handful-of-buildings-as-texas-manager-moves-into-salt-lake/
