NMHC's Doug Bibby

There’s a shift taking place in the multifamily market, a change in the dynamics between ownership and management. The shift was uncovered as a part of the Washington, DC-based National Multi Housing Council’s 18th annual ranking of the top 100 owners and managers. The shift comes in concentration, NMHC president Douglas Bibby explained to GlobeSt.com in a recent interview. The share of apartments managed by the top 50 management firms rose by 8.3% last year (a record, says NMHC, that brings the total managed to 2.6 million units–14.7% of the national rental inventory). In contrast, ownership growth rates among the top 50 rose by a relatively meager 0.8%, to nearly 2.7 million units (15.2% of the total). Growth is hard to sustain, Bibby implies, when so many owners are becoming net sellers, with the likes of Equity Residential dropping 30,000 units and Aimco shedding 22,000. In the course of the discussion, Bibby addressed why the shift took place and what it portends.

GlobeSt.com: In terms of an overview, what do you make of the statistics?

Bibby: In terms of the growing concentration of management of apartment communities, the business model of third-party management increasingly is going to require economies of scale. On the ownership side, we saw an incredible appetite for apartment communities in 2005 and 2006, which presented an almost unprecedented opportunity for attractive sales.