With Village Green Stake Acquired, Compatriot Wants More

DALLAS-In June, 2011, Sammons Enterprises Inc. organized a subsidiary, Compatriot Capital Inc., with the goal of investing in complementary real estate operating companies (REOC) across a variety of sectors. During the past six months, Compatriot has been eyeing opportunities, with one of them – Village Green – coming to fruition.

“What we’re doing is targeting established operating businesses with seasoned, stable management,” explains Paul E. Rowsey, Compatriot’s president and CEO. He tells Globest.com that Compatriot willingly acquired a 50% stake of Michigan-based Village Green because of its history and its tenured senior management team.

“The other thing they exhibited that we’re looking for is a sustainable business model through economic cycles,” he says. Village Green, a multifamily developer and management company, has a presence in predominantly urban markets such as Chicago, Cincinnati and St. Louis.

With the dust having settled, Compatriot is seeking out more REOCs; companies that can provide good synergies and complementary activities. For example, Rowsey explains, if Village Green finds a likely site on which to develop a new multifamily project and there’s an adjacent site available for a potential retail or office development, a Compatriot-partnered company could come in and do the job. Companies that become partners will keep their names and brand identities, and Rowsey indicates there is no specific defined time period as to when the joint venture would come to an end.

Rowsey says the relationship with each REOC will be unique – though all involve capital investment. In addition, “Compatriot will assume positions on the company’s boards and be involved in their strategic directions, growth and capital events,” Rowsey says, going on to say that the company is examining companies in multiple geographic areas and in different real estate sectors.

Compatriot doesn’t have any more deals planned this year, but is hoping to close at least two deals in 2012. These particular investments take a little longer than a strict asset-based transaction, so patience is paramount.

“It’s a bit like a marriage,” Rowsey remarks. “We want to make sure there is a lot of compatibility between our strategy, the other company’s strategies and the management teams.”