During its first year, Milestone partnered with Addison, Texas-based Olympus Real Estate Partners to capitalize its deals and continue the successful investment strategy used at Insignia. Landin, who headed up Olympus’ acquisitions, joined Milestone in 2004 as managing partner. The small team invested money on behalf of high-net-worth investors and owned a couple thousand multifamily units, along with a handful of other assets.
Then, in March 2005, Milestone got its first big break—and reached its first major milestone. With Dubai Investment Group as an investment partner, the firm purchased a $1 billion portfolio of 62 multifamily properties throughout the United States, catapulting its unit count to 21,000. “It was fortuitous that I had a relationship with Dubai Investment Group from my days at Insignia and was able to expand on that relationship,” Goldberg says.
With a sizable portfolio in hand, Milestone decided to maximize efficiencies by managing its own properties and acquired the management platform of now-defunct Walden Residential Properties. The firm hired Lamberti, who spent 14 years at Walden, to run Milestone Management. “At that point, Milestone morphed into a vertically integrated multifamily platform,” Landin says.
And the company rolled right along. Over the last three years, Milestone has grown from 21,000 units to more than 27,000 units, which include a combination of owned assets and a small number of fee-managed assets.
Since 2004, Milestone has executed transactions totaling more than $2.3 billion with a realized internal rate of return exceeding 30 percent on more than $1.1 billion of disposition proceeds. In 2007, Milestone grew its owned assets by 25 percent and now approaches $1.5 billion.
The team’s quick dealmaking and execution abilities pushed the size of their operations dramatically, landing the firm the No. 38 spot on MULTIFAMILY EXECUTIVE’S annual list of the Top 50 Owners in the country, as well as the No. 35 spot on the Top 50 Managers list.
Goldberg is at the forefront of the growth. “What I think distinguishes Jeff is that he has great instincts, and he has the ability to very quickly understand the atmospherics that surround a deal,” says Garrison, Goldberg’s former boss and longtime mentor. “On numerous occasions, I have gotten calls from Jeff when he is at the closing table at a law firm in the middle of the night with some issue that is fairly complicated, and he has come up with a proposed solution and isn’t at all panicked.”
STRATEGIC AGENDA Today, Milestone is armed with more than $600 million of buying power through a joint venture fund with Invesco and a high-net-worth fund raised through Deutsche Bank. Where will all that money go? To apartment properties in need of a facelift—typically a dated 1980s or 1990s project, but sometimes a project as new as 2000 that is in need of a little TLC. “Different assets have different opportunities,” Landin says. “It can be a physical repositioning play on an asset or as simple as an inefficient or troubled ownership structure.”
Milestone is specifically focused on investment opportunities in the Sun Belt states and the Mid-Atlantic, and is considering select opportunities in California and Nevada. “We do a thorough market analysis every six months in every major metropolitan area in the United States,” Landin says. “Now we are down to seven to 12 markets that our acquisition officers are very focused on.” (Milestone declined to reveal the exact markets.)
The firm gleans many of its insights via a proprietary database that includes the performance of its nearly 28,000 assets, plus third-party market research. When the firm does find an opportunity, it’s able to respond quickly. That’s due in large part to the staff, which has grown from four people at the firm’s founding to approximately 700 employees spread from Phoenix to Ft. Lauderdale, Fla. “We can evaluate an acquisition opportunity very quickly because we have people in the field located in the areas we want to pursue acquisitions,” says James Canon, asset manager at Milestone.