Back to top

Image: Bigstock

RMR Group (RMR) Expands Reach With the CARROLL Acquisition

Read MoreHide Full Article

The RMR Group (RMR - Free Report) recently completed a strategic move that positions it for substantial growth and enhanced diversification within the commercial real estate (CRE) sector. The acquisition of MPC Partnership Holdings, LLC, operating under the name CARROLL, represents a significant milestone for RMR, expanding its expertise and private capital assets under management (AUM) in the multifamily CRE space.

The acquisition, which was announced on Jul 31, 2023, underscores RMR's commitment to executing a growth strategy that leverages its robust balance sheet. The $80 million all-cash acquisition brings CARROLL to the RMR fold, marking the entrance into multifamily real estate — the only major property sector where RMR previously did not have a substantial presence.

Adam Portnoy, the president and CEO of RMR, expressed enthusiasm about the acquisition, stating, “With the CARROLL acquisition, RMR was able to implement our growth strategy of leveraging our strong balance sheet to make strategic acquisitions. Today, we acquired a vertically integrated organization that expands our scale, diversifies our platform, substantially increases our private capital assets under management, and is financially accretive.”

The CARROLL acquisition enhances RMR's multifamily platform, adding a vertically integrated organization with a proven track record. By absorbing CARROLL's expertise, RMR gains access to a talented team and a portfolio that aligns seamlessly with the company's overarching goals. This move positions RMR as a formidable player in the multifamily real estate sector, a market segment known for its resilience and growth potential.

This $80 million cash transaction is subject to customary purchase price adjustments, with the potential for incremental earnout consideration of up to $20 million based on the deployment of the remaining capital commitments of the existing CARROLL investment funds.

RMR's financial strength is underscored by the fact that, even after the completion of the CARROLL acquisition, the company retains more than $200 million in cash with no outstanding debt. This robust financial position empowers RMR to explore further growth opportunities, reinforcing its commitment to delivering value to shareholders.

With a strengthened platform, expanded private capital AUM and a solid financial foundation, RMR is well-poised for continued success in a dynamic and competitive market. This alternative asset management company, with a unique focus on commercial real estate and related businesses, manages around $36 billion in assets.

Shares of this Zacks Rank #3 (Hold) company have rallied 16.1% in the past month, outperforming the industry’s growth of 12.9%.

Zacks Investment Research
Image Source: Zacks Investment Research

A Stock to Consider

A better-ranked stock from the broader real estate sector is Legacy Housing Corporation (LEGH - Free Report) , which carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Legacy Housing Corporation’s 2023 earnings per share has moved 5.7% upward in the past two months to $2.59.

Note: Anything related to earnings presented in this write-up represents FFO — a widely used metric to gauge the performance of REITs.

Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


The RMR Group Inc. (RMR) - free report >>

Legacy Housing Corporation (LEGH) - free report >>

Published in