Affordable Housing Providers Dominate Apartment Industry's Largest Owners, According to NMHC’s Annual Ranking of 50 Largest Apartment Firms
The apartment industry made a surprising recovery in 2010 from the “Great Recession,” and that recovery is reflected in the 2011 NMHC 50, the National Multi Housing Council’s annual ranking of the 50 largest apartment owners and 50 largest managers.
The NMHC 50 helps document the apartment industry's evolution over time and helps identify trends within the sector and up-and-coming new players.
“The popularity of renting increased to its highest level since 1998,” noted Mark Obrinsky, NMHC’s Chief Economist. “This translated into higher occupancy rates across the country even though job growth was only modest.”
“The recovery also spurred a rebound in apartment prices and transaction volume, which doubled to $31 billion,” added Obrinsky. “And apartment prices gained substantial ground in 2010 after having fallen by 30 percent or more.”
Many of the changes documented by the 2011 NMHC 50 provide insights into the strategies adopted by apartment firms to survive the economic turmoil and to position themselves for the recovery.
One key change is that affordable housing providers, in the form of tax credit syndicators, have climbed to the top of the list as the largest owners of apartments. The top four slots on the owners list are now held by affordable housing firms: Boston Capital (No. 1), Centerline Capital Group (No. 2); Boston Financial Investment Management, LP (No. 3); and SunAmerica Affordable Housing Partners, Inc. (No. 4).
The number of REITs on the owners list is down to 10, from a high of 14 in 2005, and they own the smallest share (3.4%) of the overall apartment market since 1997. Just two of the top 10 owners, Equity Residential (No. 5) and AIMCO (No. 7), are public REITs.
On the whole, 2010 was a year of shrinking portfolios among the largest owners; six of the top 10 firms decreased the size of their ownership portfolios, led by AIMCO’s net selloff of 22,254 units.
On the NMHC 50 management list, Greystar Real Estate Partners, LLC recorded the largest growth, adding 33,541 apartments to take the No. 1 spot. It was the third year in a row Greystar posted the largest portfolio gain. CAPREIT, Inc. was the second-biggest gainer on the NMHC 50 managers list, more than doubling its management portfolio last year to debut on the NMHC 50 Managers list at No. 42.
NMHC partners with Kingsley Associates, a leading real estate research and consulting firm, for the NMHC 50’s research and analysis.
- The five largest apartment owners in the country are:
1) Boston Capital (158,947 units);
2) Centerline Capital Group (152,600 units);
3) Boston Financial Investment Management, LP (145,454 units);
4) SunAmerica Affordable Housing Partners, Inc. (141,113 units);
5) Equity Residential (129,604 units).
- Moving into the second and third slots are new incarnations of former top-ranked firms: No. 2, Centerline Capital Group, arose from the 2005 leader CharterMac, while No. 3, Boston Financial Investment Management, LP, is a new manifestation of the 2009 top-ranked MMA Financial.
- Forty-two of the top 50 firms own market-rate apartments, 33 firms own tax credit or affordable apartments and 18 firms have senior housing apartments.
- Overall, 30 of the NMHC 50 owner firms (including newcomers) were net acquirers of apartments last year, while 20 were net sellers. The net sellers reduced their portfolios by 81,274, while net buyers added a total of 98,817 apartments.
- Total apartment holdings by REITs decreased, and the REIT share of the overall market fell to 3.4 percent, the lowest level since 1997, though there are 10 REITs among the 50 largest apartment owners, the same number as last year.
- Six of the top 10 firms decreased the size of their ownership portfolios, led by AIMCO’s net selloff of 22,254 units.
- There were seven new firms added to the NMHC 50 owners list this year: Centerline Capital Group (No. 2); Boston Financial Investment Management, LP (No. 3); Hunt Companies, Inc. (No. 14); J.P. Morgan Asset Management (No. 19); CB Richard Ellis Investors, LLC (No. 47); MCA Housing Partners, LLC (No. 48); and GID Investment Advisers, LLC (No. 50).
- As of January 1, 2011 the top 50 apartment owners held 2.93 million apartments. A firm had to own 25,002 units to make the NMHC 50 owners list; the median owner has 43,846 units.
- The five largest apartment managers in the country are:
1) Greystar Real Estate Partners, LLC (187,360 units);
2) Riverstone Residential Group (162,182 units);
3) Pinnacle Family of Companies (151,367 units);
4) Lincoln Property Company (133,425 units); and
5) Equity Residential (129,604 units).
- Greystar for the third year in a row had the largest portfolio growth, increasing the number of apartments under management by 33,541 to become the largest apartment manager in the country.
- Both the mean (average) and the median rose in 2010 and are close to their all-time highs. A firm had to manage 28,085 apartments to make the NMHC 50 managers list, up from last year’s 26,845 threshold. The median manager controls 39,788 units, up from last year’s 37,767.
- Thirty-three firms on the management list have at least 30,000, but fewer than 50,000, apartments. (By contrast, 19 firms on the owners list are in that range.)
- All but one of the top 50 managers have market-rate apartments in their portfolios, 37 firms manage tax credit or affordable apartments and 12 firms manage senior housing apartments.
- The number of apartments included in the NMHC 50 managers list increased by 1.2 percent to 2,722,894, the second-highest level in the survey’s history.
- Only two new firms joined the NMHC 50 managers list this year: Multifamily Management Services (No. 31) and CAPREIT, Inc. (No. 42).
- The NMHC 50 apartment managers operate 2.72 million apartments.