Greystar’s Wes Fuller: Global Growth through Scale

Greystar has grown from being the largest apartment investor in the U.S. to a leading global asset manager. In an exclusive interview with Juniper Square, Chief Investment Officer Wes Fuller attributed Greystar’s success to the power of scale and the company’s pivot in 2009. As the company enters its fourth decade, Fuller is adamant that Greystar’s continued global growth will be driven by urbanization and finetuned with information gleaned from its internal data on 900,000 units and the insights of its 22,000 employees.

Fuller joined Greystar in 2003, ten years after the company was founded. At the time, Greystar was focused on multifamily developments and had already expanded by developing its own service operations to ensure top-quality maintenance and repair.

As Fuller moved around the company’s U.S. offices, he discovered the secret of scale. “Our best-performing office completely demonstrated the strength of scale,” he said. “They brought in great people who executed at a very high level, which meant the portfolio performed better. These great results attracted more clients and investors, which gave Greystar more business. The flywheel just spins faster as a result of vertical integration and great people performing really well.”

Greystar realized it needed to leverage this approach in all the cities with long-term conviction about the fundamentals. And since all cities need housing, the company had many places to develop the flywheel and enjoy its benefits.

In 2009, as the real estate industry lay gasping after the Global Financial Crisis (GFC), Greystar decided to add a fund management business to its multifamily operations. Over the next two years, Fuller led the effort to raise capital from institutional investors, pension funds, endowments, and sovereign wealth funds for a comingled discretionary investment vehicle. At the time, U.S. institutions were fully allocated to multifamily investments and struggling with the impact of the GFC on their private portfolios, which meant Greystar approached offshore investors in Europe, Asia, Canada, and the Middle East. The fund closed with more than 200 international investors.

These relationships started Greystar’s international operations as well. Although the funds business initially focused on U.S. assets, the new international investors suggested that Greystar acquire, build, and manage housing in their geographies. Fuller pointed out, “Greystar is very entrepreneurial. The entire attitude is that if we manage our downside, the upside will take care of itself.” The company has since expanded into Europe and Asia, and currently, one-third of its $76 billion AUM, in both units and value, is outside the United States.

The population is growing, and so is urbanization. Despite the COVID-related exodus from urban settings, Fuller noted the pendulum is swinging back, particularly among younger people. “There comes a life stage when people are going to look to have a house, when they want more space,” he said. And Greystar is looking to rent single-family dwellings to those people, as well as apartments to city dwellers.

Urbanization also drove Greystar’s entry into the Pre-Built Student Accommodations (PBSA or student-housing) business and into senior housing, allowing the firm to cover all ends of the age spectrum. “You can apply the 80/20 rule,” he said. “Managing any of these assets is 80% the same, whether student housing, multi-family rentals, or senior communities. The other 20% is customized.” Around the world, Greystar is moving into the “living” industry, regardless of the age or circumstances of the tenant. “We look to attract student tenants and keep them throughout the arc of their life,” Fuller noted.

With 36 offices in 17 countries and 22,000 employees, Greystar is well-positioned to stay acutely aware of the nuances of different geographies, relying on its internal data. When someone moves out of one of its 900,000 units—the company has only 40% turnover— Greystar’s exit process provides valuable data that the company mines to identify trends in the market. In addition, it pays attention to the insights and perspectives of its employees.

Greystar assesses opportunities across four elements:

1. Fundamentals: Where does demand exceed supply?
2. Internal aptitude: Where does Greystar have a competitive advantage?
3. Pricing: Where is the opportunity mispriced and the entry price attractive?
4. Competition: Where is capital going and where is it leaving?

All this information is incorporated into developing “high conviction” opportunities, on which Greystar’s teams focus. The company then finds like-minded partners to collaborate with or co-invest in these projects. As Fuller explained, “This is a very methodical approach for sourcing strategic and directed opportunities.”

With its focus on addressing the needs of the living sector, Greystar has expanded beyond buildings. It has started integrating logistics facilities into its housing assets to simplify package delivery and set the stage for future growth.

“Urbanization drives demand for housing and thus creates strong fundamentals for us,” Fuller said. Throughout their life cycles, people will always need homes, and Greystar will provide those homes, along with the associated services and necessary financing.