Institutional investors are making strategic changes in the aftermath of the pandemic. In addition to holding properties for longer, institutions are also buying an interest in operating and property management companies as part of their new business model.

"When big funds are looking to make a commitment to enter the multifamily space and they haven't been there before, they don't just look at assets," Jahn Brodwin, senior managing director in the real estate practice at FTI Consulting, tells GlobeSt.com. "If they are interested in a portfolio from an operator, they are now buying the assets and an interest in the company, and then retaining the operator as management."

By purchasing a stake in the operating company, these funds gain control of the operations at the property and reduced operating costs as well. "When you own a piece of the operating platform, you are getting much better control of the asset and, if you buy into the platform right, hopefully, you are enhancing your returns," says Brodwin.