>From the time Irving, Texas-based JPI started business in 1974, this luxury apartment developer, owner and management group has been growing at a rate of success not many can compete against in today's fast-paced multifamily marketplace. This year JPI is pursuing new markets, developments and acquisitions nationwide.
JPI's portfolio comprises 55 properties with 20,392 units encompassing more than 18.56 million sq. ft. of living space in 12 states. A privately held firm, JPI has 83% ownership of 43 properties and more than 16,842 units in its managed portfolio. Third-party owners have 17% of the group's holdings at 12 properties with 3,550 units. JPI is looking at production for this year to be approximately $850 million in new product and $150 million in acquisitions.
By year-end 1996, JPI had started its explosive growth by nearly doubling its assets to $1.2 billion and increasing gross revenues by 60% to $568 million. In 1997, JPI started on more than 6,500 apartment homes, sold 3,500 apartment units and acquired another 700 multifamily residences. The luxury market leader has more than 8,300 units under development and a portfolio valuation of $2 billion-plus.
During July of last year, JPI launched Project 2000 - a new development program offering amenities targeted for tomorrow's residents today - with development of the prototype community, Jefferson Estates, in Richardson, Texas. The $39 million, 528-unit community features apartments that have amenities typically found in single-family homes such as crown molding, berber carpeting, two-sided fireplaces, water filtering systems, video on-demand and island kitchens. State-of-the-art technology onsite includes units that are wired for high-speed Internet access, living rooms with theater-quality sound systems, computer ports in many of the units and closed-circuit television security to view gated areas, pools and playgrounds. The property is located in North' "telecom corridor" - a rapidly growing high-tech employment base - where JPI specifically focused on this type of customer.
"With the success of Project 2000, we're working on what we may call Project 2001, where we will plan and utilize the things we learned from Project 2000 - beyond just performing more services," says J. Frank Miller III, chairman and CEO of JPI. "Some of the highest quality projects for our projected 30 new developments in 1998 will take on the same look as Project 2000."
Moving into 1998, JPI wants to develop more communities utilizing the $470 million venture investment partnership it signed with Stamford, Conn.-based GE Capital Services in September 1997. The initial commitment will be for JPI to contribute $20 million and for GE Capital to provide $470 million in equity to JPI over the next three years, helping the firm build $2.2 billion in assets.
"Our partnership with GE Capital in no way affects our existing relationships with other investors. This partnership gives us the capital to do new projects and the ability to complete them quickly," says Miller. "JPI c ontinues to be a leader in the multifamily industry. 1996 was a record-breaking year with our assets nearly doubling, and the new partnership will enable us to continue growing, and we look forward to new opportunities for expansion."
The development of the second generation of Project 2000 is being funded by the GE Capital venture. The first property in the second generation is Jefferson at Timberglen, a 522-unit luxury community located in Dallas. The community will include one-, two- and three-bedroom units with rents ranging from $790 to $1,720 per month. Jefferson at Timberglen is scheduled for completion in September 1999.
"Branding was very important when we thought about Project 2000," says Robert D. Page, president and COO at JPI. "As for Project 2001, we're moving forward rapidly. The high level upgrades are in about 90% of our current projects for 2001, and we anticipate outstanding success in all of our targeted markets."
As a leader in luxury Class-A development, the next level for JPI is obvious. "There is also a good chance we'll do a highrise project in the next 12 to 18 months," adds Page. "In terms of starting dates, we're in the predevelopment stages, but we will stay at the high-end of thespectrum."
"Highrise product at JPI is certainly something we're investigating, and we're not losing focus on what our success has been and what got us here," says W. Pretlow Riddick, executive vice president and managing partner of JPI's Northeast division. "My market being in the Northeast presents an excellent opportunity, and there are highrises being built as we speak in this market. So highrise is a known commodity, and demand is strong in submarkets within the Northeast. I think it's something we'll ultimately get into at a future date."
With all of this growth currently, what's next for JPI in the year ahead? "With the GE Capital transaction, we are able to focus more on honing our processes in analyzing each of these projects and in numerous markets in what we're calling 'widening the gap'," says Miller. "Now that we have the GE investment, we can even focus on doing a better job and making sure we're developing the right projects in the right markets at the right time. Part of our strategy in 1998 is to also be an active buyer of Class-B and Class-B+ type product, so we'll try to be even more of a buyer of assets this year and continue to expand our capabilities. We also think that with the cycling of different submarkets, either today or in the near future, it will be a good time to buy, and we want to be sure our offices are prepared to do that."
The new submarkets that JPI will target for development are a main focus for the company. "We're heavily weighted into the Northeast, West Coast and the Northwest. We're going to be starting projects in Denver, Phoenix, Dallas and Atlanta," adds Miller. "We're talking about highrise, but it's not in the cards for this year. If we did highrise, it most likely would be in the Northeast or maybe even in Florida."
As JPI moves into new markets, the demographics of residents constantly change as well. "The amenities we put into a JPI community certainly attract more affluent residents. Our services and management activities provide, besides telecommunications and business centers, amenities that cater to our residents' needs at all times," says Riddick. "We look at what JPI can do to make a resident's life more carefree, and that is how we try to set our communities apart from the competition. JPI has concierge services that will help our residents with everything from watering plants to arranging for movie theater tickets. For instance, if a resident is moving in, we will make sure they get whatever is needed to accomplish the move-in. We focus on the basics and get the job done for our residents."