SALT LAKE CITY--(BUSINESS WIRE)--Bridge Investment Group Holdings Inc. (“Bridge”) (NYSE: BRDG) announced today that it has entered into definitive agreements to acquire certain assets of Gorelick Brothers Capital (“GBC”), including a portfolio of single-family homes owned by GBC-managed vehicles and a majority of GBC’s asset and property management business. GBC is a privately held, vertically integrated investment management firm focused on investing in the single-family home rental (“SFR”) industry.
In connection with the transactions, Bridge is acquiring 60% of GBC’s business, valued at $50 million. Bridge expects to fund 50% of the acquisition with cash and 50% with units of Bridge Investment Group Holdings LLC. Upon the consummation of the transactions, (i) the GBC team will join Bridge to launch an SFR strategy on the Bridge platform, (ii) Bridge and the key principals of GBC will form and jointly own a new SFR investment manager within Bridge, and (iii) Bridge and GBC principals will lead a $660 million recapitalization of a portfolio comprising more than 2,700 homes in 14 markets, concentrated in the Sunbelt and certain Midwest markets of the United States. Assuming the satisfaction of closing conditions, including obtaining necessary approvals, both the acquisition and recapitalization are expected to close in the first quarter of 2022. Upon closing, Bridge will indirectly own a majority of the single-family rental investment manager, and the principals of GBC will own 40% of the new Bridge single-family rental investment and property management company.
Gorelick Brothers Capital is a 14-year-old investment firm based in Charlotte, North Carolina, that began investing in single-family rental properties in 2013. The GBC team comprises more than 90 people, including approximately 70 that work in local markets as part of the firm’s property management division.
“We are delighted to add the Gorelick team and their carefully curated SFR portfolio to the Bridge family,” said Robert Morse, Executive Chairman at Bridge. “We have long been investors in the residential real estate sector and are excited to expand into the single-family market. The addition of SFR capabilities enhances our residential activities, and positions Bridge to offer additional investment opportunities to investors to benefit from the protracted U.S. housing shortage. Concurrent with the recapitalization of the portfolio, Bridge is launching an investment strategy to further expand our SFR activities in selected prime growth markets in the U.S.”
“We are excited to join forces with Bridge as we enter the next chapter in our firm’s history,” said Todd Gorelick and Christopher Skardon, Co-Managing Partners of GBC. “Bridge’s hands-on, vertically integrated investment model will add significant strength and scale potential to our business. Together with our colleagues, we look forward to driving continued strong performance and business growth for many years to come.”
“The GBC portfolio has meaningful overlap with our carefully targeted multifamily footprint and reinforces our strategic position as a leading participant in the U.S. residential sector,” said Jonathan Slager, Chief Executive Officer at Bridge. “We are excited about acquiring a meaningful presence in a highly fragmented sector, where only approximately 2% of assets are owned by institutional managers. GBC’s experience with a variety of acquisition channels, including portfolio transactions and build-to-rent, positions the team for continued growth as we combine our companies at this exciting time.”
RBC Capital Markets LLC acted as financial advisor to Bridge and Latham & Watkins LLP acted as Bridge’s legal counsel. Goldman Sachs & Co. LLC acted as financial advisor to GBC and Kirkland & Ellis LLP acted as GBC’s legal counsel.
ABOUT BRIDGE INVESTMENT GROUP
Bridge is a leading, vertically integrated real estate investment manager, diversified across specialized asset classes, with approximately $31.8 billion of assets under management as of September 30, 2021. Bridge combines its nationwide operating platform with dedicated teams of investment professionals focused on select U.S. real estate verticals: multifamily, affordable housing, seniors housing, office, development, logistics net lease, logistics properties, debt strategies, and agency mortgage-backed securities.