NMHC found that the share of apartments managed by the top 50 management firms rose by a record 8.3% to 2.6 million units, which means the top 50 firms now oversee 14.7% of the 17.6 million apartments in the US.
This growth spurt is a departure from the previous three or more years, Mark Obrinsky, NMHC chief economist, tells GlobeSt.com. "Even in years when the number of apartments managed increased among firms, it never rose by that much," he says.
Obrinsky points to two trends as the reason: one, institutional owners such as pension funds are opting to give their multifamily portfolios over to one management firm, instead of divvying it up on a region by region basis as they have in years' past.
Two, technology improvements such as property management systems, rent payment applications and demand-based pricing models have made it easier for operators to achieve economies of scale.
Obrinsky acknowledges these technologies have been in the market before 2006. "You can't predict, though, when tech developments will turn into hard numbers in terms of productivity and efficiency."
He says he expects to see these trends continue next year, with additional increases in apartments owned by managers and more consolidation. "We will see the bigger players get bigger and even the medium sized players grow significantly," he predicts.
According to the study, the five largest apartment firms in the country are Denver's Aimco (211,800 units); Baltimore's MMA Financial LLC (177,062 units); Chicago's Equity Residential (165,716 units); Boston's Boston Capital (156,758 units); and Los Angeles' SunAmerica Affordable Housing Partners (145,224).
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
