Vertically Integrating: Brazos Residential Announces Property Management Subsidiary

On September 13, 2023, Brazos Residential, a Dallas-based REPE firm, announced the formation of Brazos Residential Management (BRM). The in-house management company will allow the company to ensure high standards of management as well as keep a finger on the pulse of their nearly 4000 multifamily units across the DFW area and North Carolina.

Only formed in 2022, Brazos' portfolio has been valued at over $425mm. Taking advantage of their portfolio's scale, Brazos has been prioritizing further vertical integration. With the size of their portfolio, they have the scale to make this venture feasible. Michele Flores, COO of Brazos Residential, spoke to the opportunity offered by opening up BRM:

Brazos Residential Management represents the next phase in our commitment to delivering exceptional value to our residents and investors. Drawing upon my 30+ year career in multifamily property management, I am looking forward to being a part of Brazos Residential's next adventure. I am eager to build, grow, and develop our teams and create tailored, outstanding outcomes for our residents.

To complement BRM's oversight of stabilized properties, they are also bringing construction management in-house to better manage their renovations and benefit from the efficiencies that come with in-house operations. Brazos Residential describes their strategy as focusing on value-add and opportunistic investments, so there is likely plenty of construction involved in their deals. Will Hancock, co-founder and managing partner of Brazos Residential, spoke to the philosophy of vertical integration:

Efficient and finely tuned operations will be the most significant determinant of Brazos' success, especially in today's market. Michele's impressive track record of achievements in the multifamily industry and her profound market insights will prove invaluable to BRM.

Vertical integration is an interesting trade-off for investors to consider. On one hand, bringing an experienced team in-house ensures you have complete control over policies and quality-control. On the other hand, some investors may find it more advantageous to specialize in one domain while developing relationships with others who can provide other services. Both have their merits and downsides. Let us know what you think in the comments!