Private-equity firm Golden Gate Capital has reached a deal to purchase a majority stake in Green Street Advisors Inc., a research firm in the commercial-property industry, Green Street executives said Tuesday.

The deal, which hasn't yet closed, would bring a major outside investor into the firm for the first time. Green Street is owned almost entirely by current and former employees.

"I think they see an opportunity to help us grow in a large and rapidly growing market," said Craig Leupold, president of Newport Beach, Calif.,-based Green Street.

A Golden Gate spokeswoman declined to comment on the deal.

Mr. Leupold declined to comment on the price of the transaction. He said the investment would allow the company to grow, perhaps expanding into areas such as fixed-income research on real-estate debt.

Other potential investments include further geographic expansion—the company has been in Europe for more than six years—or improved research technology, he said.

The private-equity investment would mark a new chapter for Green Street, which began as a two-person shop in 1985, founded by Mike Kirby and Jon Fosheim. The two met while working at Bear Stearns & Co., and came up with the idea for the company at a cafe on Greene Street in Manhattan. Their plan was to focus on what they believed was a growing sector of real-estate investment trusts.

Since then, the firm—and the REIT market—have grown substantially. Green Street has 30 analysts and research associates in the U.S., which the company says makes it significantly larger than any REIT research division of Wall Street banks.

The growth has come in part because of its unusual model. Many other firms with big real-estate research teams also have investment-banking divisions.

Green Street makes part of its income from trading stock, but doesn't have an investment-banking business. Its executives contend that for that reason, they can be more objective in their criticism of companies because they don't have to worry about losing investment-banking clients if they are too tough.

Mr. Leupold said that the firm's management earlier this year tapped investment bank Evercore Group to search for potential investors in the company as a way of helping existing owners sell some of their stakes, and to allow for a transition from current leadership to the next generation of employees.

It ultimately chose Golden Gate Capital, a large, San Francisco-based investment firm that holds stakes in an array of assets, including technology companies and retail chains.

In May, it attracted attention in the real-estate sector when it agreed to pay $2.1 billion to Darden Restaurants Inc. for its Red Lobster chain of restaurants.

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