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{{ routeNext }}Three of these sell equity and sit on the same line, and what separates them is how much control changes hands. Control is also what sets the price, because a buyer who cannot direct the business pays less per point of ownership than a buyer who can, which is why those three do not simply scale into one another. Selling part of the company sells assets rather than equity, so control of what remains never changes hands.
Two offers quoting the same multiple on the same earnings can pay very different amounts, at different times, with different degrees of certainty. The differences sit in how much is paid on the closing date, how much is held back and for how long, and what you are still holding when the dust settles.
Those three questions are set against every structure on one page.
An owner who does not know his own range negotiates against the buyer's number instead of his own, and the buyer's number is the only one in the room until there is a second one.
The estimator takes ten inputs and returns a range along with what is pushing you toward the top or the bottom of it. The inputs are required because they produce the answer rather than as a price of admission.
The type of buyer determines the structure more than the size of your company does, and it also determines what happens to your staff, your brand and your software after the closing date.
de Anda Capital acquires property management companies and is one of the acquirer types described on that page, and we say so there as well as here.
Selling part of the company. Cash for a non-controlling stake, with ownership of the rest and control of the business retained.
A minority sale sells less than half of the business to an outside investor. It is the structure most owners describe when asked what they actually want: some money out, and nothing else changes. It is also the least available of the three at this size. What makes it rare is that the investor is buying a stake it cannot control in a business that depends on the person who can.
Every minority investment into a property management operating company with disclosed terms that we could locate involved a business well above 2,000 doors, and we found no named investor actively writing minority checks into operators at 250 to 2,000 doors. Pricing figures below come from general lower-middle-market M&A content, not property management transactions. What follows is informed judgment on the buyer side of the industry.
A minority sale pays the seller once, and leaves the rest where it is:
With the right investor, that trade can provide value to the seller in four ways.
Overall, a minority sale keeps the business and the upside with the seller, in exchange for less cash than any other structure pays for the same share. An investor that cannot control the company protects itself through the terms instead: consent rights, a preferred return, and a way to get its money back out. Every one of those terms is a piece of control the seller gives up without giving up the majority.
The same six acquirers active in property management look at a minority stake very differently, and most of them do not buy one at all. A seventh type, the minority and structured equity fund, exists for this structure but has no track record in property management at this size.
Minority equity funds active in the lower middle market, such as North River Group, McCarthy Capital, Copley Equity and New Heritage Capital, are not property management specialists. Named for illustration, not as known investors in this industry.
A minority investor is underwriting two things a control buyer can fix after close and it cannot: the business and the person running it. That is why size matters even more here than in the other structures. Below a certain scale, there is not enough business for a non-controlling stake to be worth the terms around it.
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An investor without control writes its protection into the terms. The rights attached to the stake are where a minority sale is actually priced, and where most of the surprise is.
Standard minority protections in private company investing. Which ones appear, and how strongly, is negotiated deal by deal.
Every minority sale keeps the operator in charge. What differs is whether the goal is money out or a partner in, and that decides which investor is worth talking to and which terms are worth accepting.
Which of these is available depends on the business underneath it, what the operator does on a week to week basis, what management sits below him, and whether the business has an exit an investor can see.
de Anda Capital generally does not take structured minority positions. We buy property management companies to own and build them, and a non-controlling stake does not let us bring the infrastructure that makes an acquisition work: diligence, FP&A, legal, technology enablement, sales and go-to-market, and post-close integration.
We say so because the investor this page describes is rare at this size, and an operator looking for one should know which buyers are not it. What we can do is help an operator who wants partial liquidity see which of the alternatives fits.
Click here for majority recapitalization, or here for access to capital.
Everything above describes how these transactions work and who does them. Whether one is available to your business, and what it would look like, depends on your doors and markets, your normalized earnings, what you personally do in a week, the management sitting beneath you, and your retention history.
We acquire property management companies. If you are weighing a minority sale and want to understand which structure your business can actually support, and where it stands from a buyer’s point of view, fill out the information below.
We are not consultants and we are not an advisory firm. We share what we see with sophisticated operators at no charge, because the conversations are how we learn the market and how we meet the people in it.
Acquirer behavior by size reflects de Anda Capital’s own reading of the market, not published transaction data. Nothing here is legal, tax or investment advice. de Anda Capital acquires property management companies and is one of the acquirer types described in this document.
A majority recapitalization is the sale of control while keeping a stake. The buyer takes more than half the equity and most of the money changes hands at close, and the owner keeps the rest and usually keeps running the business for a period afterwards.
It is described in the market as taking chips off the table with a second bite to come, and both halves of that description are accurate, though the second half is less certain than it sounds.
Control moves, and it moves completely. The buyer appoints the board, sets the budget, decides on acquisitions and debt, and can replace management including you.
Most buyers at this size want the owner to stay, because the owner is often where the client relationships and the local knowledge sit, but wanting you to stay and being obliged to keep you are different things and the documents will say which one applies.
The stake you keep is revalued when the new owner sells the business, which is usually somewhere between three and seven years later, and the return on that stake is what people mean by the second bite.
It can be the larger half of the total proceeds, particularly where the buyer is assembling a platform and the combined business will sell at a higher multiple than yours would have on its own.
All four are worth understanding before signing.
Private equity hold periods have lengthened well past what the market assumed five years ago, the number of sponsor-owned businesses waiting to exit is large, and the dominant route out is now a sale to another sponsor rather than to a strategic buyer or to the public markets.
None of that makes rollover a bad structure. It does mean that the second bite is later and less certain than the model that was being sold in 2021, and an owner deciding how much to roll should price that rather than assume it away. We say this as a buyer that offers rollover, which is exactly why it is worth saying.
It fits an owner who wants most of his money now, believes the business is worth more inside a larger platform than on its own, and is willing to work for somebody else for a few years.
It fits badly an owner whose main reason for selling is that he wants to stop working, because the structure is built around him not stopping.
The tax treatment of rolled equity is materially different from the treatment of cash proceeds and it is specific to your situation. Confirm it with your own advisors before the structure is agreed rather than after.
Cash and deferred consideration for 100 percent of the company. Ownership ends at close. How long you stay responsible for it is negotiated separately.
A full exit sells the entire business. It is the most common way a property management company changes hands and the one with the widest range of buyers at every size. It is also the structure where the headline price and what reaches the seller drift furthest apart, because what is being sold is a set of management agreements that owners can usually cancel on 30 to 60 days’ notice.
The buyer universe and size matrix below reflect how de Anda Capital reads this market from its own sourcing and acquisition work. Price and structure ranges cited are published by PM advisors and brokers and are generalizations, not disclosed terms of specific transactions. Consideration mix is almost never published for property management deals.
A full exit pays the seller once:
There is no retained stake and no second payment when a platform sells. With the right buyer, that trade can provide value to the seller in four ways.
Overall, a full exit gives the seller certainty and a defined end in exchange for the upside a platform captures after close. A consolidator that buys earnings at a tuck-in multiple and holds them inside a platform valued at a higher one keeps that difference. Every buyer also has its own reason for deferring part of the price, and in property management that reason is almost always retention.
There are generally seven types of acquirers who buy property management companies outright. Six are the same acquirers active in recapitalizations. The seventh, the individual buyer, only does full exits and is the most common buyer at the smallest sizes.
Every acquirer has its own acquisition criteria. Some buy on an EBITDA threshold, others on door count, and some only in markets they already run. The same PMC is a different transaction to each of them depending on where it sits, and that decides how much of the price a seller receives at close and how long they are expected to stay.
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Every full exit ends ownership. What it does not settle is how long the seller stays involved, and that shapes the structure, how much is paid at close, and which buyers are worth talking to.
Which of these is available depends on the business underneath it, what the operator does on a week to week basis, what management sits below him, and what the book looks like without him involved.
Everything above describes how these transactions work and who does them. Whether one is available to your business, and what it would look like, depends on your doors and markets, your normalized earnings, what you personally do in a week, the management sitting beneath you, and your retention history.
We acquire property management companies and would look at a full exit on the terms described above. If you want to understand where your business stands from a buyer’s point of view, fill out the information below.
We are not consultants and we are not an advisory firm. We share what we see with sophisticated operators at no charge, because the conversations are how we learn the market and how we meet the people in it.
Acquirer behavior by size reflects de Anda Capital’s own reading of the market, not published transaction data. Nothing here is legal, tax or investment advice. de Anda Capital acquires property management companies and is one of the acquirer types described in this document.
Selling a piece of the business rather than a share of it: a book of management agreements, a market, or a line of business. The entity, and everything not sold, stays yours.
A partial sale transfers assets, not equity. The buyer takes the agreements, and sometimes the staff and office, for one part of the business, and the seller keeps the company, its other doors, and full control of what remains. It is common in property management and well understood by buyers. It is also priced below a sale of the whole business, because the buyer gets the doors without the brand, systems, or assignment certainty that come with the entity.
Named transactions below are from public announcements and company newsrooms. Per-door and revenue pricing ranges are published by PM brokers and advisors, or reflect practitioner consensus, and are generalizations rather than disclosed terms. What follows is informed judgment on the buyer side of the industry.
A partial sale pays the seller for one piece, and leaves the rest untouched:
With the right buyer, that trade can provide value to the seller in four ways.
Overall, a partial sale is the most flexible way to raise cash from a property management company without selling equity, and the least valuable per door. A buyer of a book is paying for agreements that owners can usually cancel on 30 to 60 days’ notice, without the organization that keeps those owners. That discount, and whether the business left behind is still the right size, are the two things to weigh.
There are four pieces an operator can sell without selling the company. They transfer different things, attract different buyers, and leave different businesses behind.
The last structure is described in multifamily as a lift-out or management-only transaction, where the owned portfolio becomes the anchor client of the management company sold.
The acquirers active in property management treat a partial sale as a purchase of doors. The ones that buy them most readily are the ones that already have the infrastructure to absorb them.
Named transactions: Evernest acquired Darwin Homes’ retail property management division (500+ homes) and Picket Homes’ management division; HomeRiver acquired 900+ units from Roofstock and 800+ units in a single 2022 portfolio deal. Company newsrooms.
For a partial sale, the size that matters is the size of the piece, not the company. A book of 150 doors and a market of 800 doors are different transactions, and they attract different buyers at different prices.
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A book is only worth the doors that actually transfer. Four things decide how many do.
Per-door ranges from different published sources span $200 to more than $2,500 and do not overlap consistently. Treat any per-door figure as a starting point for conversation, not a price.
This is the part most operators underestimate. The buyer takes the doors. The seller keeps most of the cost of running them.
Every partial sale keeps the company. What differs is whether the goal is cash or a better business, and that decides which piece to sell and who to sell it to.
Which of these is available depends on the business underneath it, which doors carry the margin, what the operator does on a week to week basis, and whether what remains still stands on its own.
de Anda Capital buys books of management agreements and parts of companies as well as whole businesses. What we look at is the same in each case: which doors will actually stay once they transfer, who holds the relationships behind them, and what the operator keeps afterward.
We bring the infrastructure we already run to the transfer: diligence, FP&A, legal, technology enablement, owner communication, and post-close integration. Below are some of the ways we work with operators selling part of their business.
Everything above describes how these transactions work and who does them. Whether one is available to your business, and what it would look like, depends on your doors and markets, your normalized earnings, which doors carry the margin, the management sitting beneath you, and your retention history.
We acquire property management companies and buy books and parts of companies on the terms described above. If you are weighing a sale of part of your business and want to understand how a buyer would price it, and what it would leave behind, fill out the information below.
We are not consultants and we are not an advisory firm. We share what we see with sophisticated operators at no charge, because the conversations are how we learn the market and how we meet the people in it.
Acquirer behavior by size reflects de Anda Capital’s own reading of the market, not published transaction data. Nothing here is legal, tax or investment advice. de Anda Capital acquires property management companies and is one of the acquirer types described in this document.
The headline is the number on the letter of intent. What reaches you depends on the structure, and the same headline can put very different amounts of cash in your account.
Operators tend to compare offers on price. Buyers build them from components: cash at close, money held back, money owed later, and in some structures a stake that pays only when someone else sells. Each component carries a different level of certainty and arrives at a different time. This page lays out what each structure pays, when, and what has to go right for the rest of it to arrive.
Ranges below are published by PM advisors and brokers, or drawn from general lower-middle-market M&A data where property management figures do not exist. They are generalizations, not disclosed terms of specific transactions. Consideration mix is almost never published for property management deals.
Every liquidity structure sets three variables. Operators tend to treat them as one thing called an exit with a price attached. They move separately, and no structure maximizes all three.
Full exit range: PM advisor publications. Minority discount: general M&A advisory content, not property management specific. Majority recap stake range: PM advisor publications.
An illustration on $1 million of EBITDA and an enterprise value of $4.5 million, sold three ways. The assumptions under each column are typical of that structure, not terms from any transaction.
Assumptions. Full exit: 65 percent cash, 10 percent escrow, 10 percent seller note, 15 percent retention earnout. Majority recap: 90 percent cash on the stake sold, 10 percent escrow, rollover in place of an earnout. Minority sale: 30 percent discount to pro rata control value, 5 percent escrow. Illustrative only.
The full exit has the largest headline and puts only slightly more cash in hand at close than the recapitalization, because more of its price is deferred against retention. The recapitalization defers less because the retained stake already keeps the seller aligned. The minority sale pays the least now and leaves the most in the seller’s hands, including the decisions.
Whatever the structure, these come off the headline before the cash arrives, in roughly this order.
Two offers at the same number are not the same offer. The question for each piece is what has to go right for you to receive it.
Retention earnouts and clawbacks are standard in property management because the buyer is paying for doors that can leave on 30 to 60 days’ notice. How the earnout is written matters more than its size.
A higher headline with a punitive earnout can pay less than a lower headline with clean terms.
The percentage tells you little on its own. Whether the stake sits alongside the buyer or behind a preferred return, how much it is diluted by follow-on capital and incentive plans, and when the buyer intends to sell decide what it pays. In a minority sale the same questions run the other way: the investor’s preference and put rights sit ahead of the majority you kept.
Selling does not end every obligation attached to the business, and the structure decides which ones survive.
Guarantee release, bond reassignment and tail coverage practice in property management deals is thinly published. Confirm with transaction counsel.
Everything above describes how the pieces of a deal behave. What an offer on your business would actually pay, and what you would be taking on to collect it, depends on the buyer, the structure, your agreements, your trust accounts, and your retention history.
If you have an offer in hand and want to see what it actually pays, or want to understand where your business stands from a buyer’s point of view, fill out the information below.
We are not consultants and we are not an advisory firm. We share what we see with sophisticated operators at no charge, because the conversations are how we learn the market and how we meet the people in it.
Structures, ranges and illustrations are indicative, not quotes or offers. Nothing here is legal, tax or investment advice. de Anda Capital acquires property management companies and is one of the acquirer types described on this site.
The buyer universe for property management companies has widened considerably, and the type of buyer on the other side of the table determines more than the price.
It determines how the deal is structured, what is held back and for how long, what happens to your staff and your brand after the closing date, and whether you are expected to stay. An owner who has been approached and does not know which kind of buyer he is talking to is negotiating without knowing what the other side wants.
Buyer type and size are not independent. Most of the buyers who pay the highest multiples do not transact at the smallest sizes, and the multiples published in the market overwhelmingly describe the bands where the institutional buyers are active.
An owner reading a range that describes a transaction he cannot access is being given an orientation that is worse than none.
What a property management company is worth at your door count →No competitor publishes this and it is the question owners ask last and care about most. What happens to the people, to the name on the door, to the software everybody has learned, and to the owner relationships that took years to build is a function of what the buyer is trying to accomplish rather than of anything negotiated in the purchase agreement.
A buyer assembling a national platform converts you because the value of the platform comes from everything running the same way. A buyer adding density in a market keeps you because the local brand is part of what he bought.
And if you can, speak to the people who ran them.
de Anda Capital acquires property management companies. We are in the last row of the table above, which is the independent sponsor and family office category, and we are one of the buyer types this page describes rather than a neutral observer of them.
That category attracts two fair objections. Both are worth asking any buyer in this category, including us.