Boston Capital Gains Top Owner Spot; Pinnacle Leads Management List;
AIMCO Top Seller; Greystar Fastest Growing Third-Party Manager
Every facet of the apartment industry was touched by the Great Recession in 2009, according to the NMHC 50, the National Multi Housing Council’s annual ranking of the 50 largest apartment owners and the 50 largest apartment managers.
“Apartment sales transaction volume plummeted,” notes Mark Obrinsky, NMHC Chief Economist. “Only $14 billion in properties changed hands in 2009, an 86 percent drop from two years ago. In addition, new apartment construction set an all-time post-World War II low in 2009, at under 100,000 new starts.
“As a result, most changes to the NMHC 50 rankings were modest, although there were some notable changes at the top of the NMHC 50 owners list.”
Demographic trends, changing lifestyles and the nation’s need to grow more sustainably all point to strong long-term demand for apartments, adds NMHC President Doug Bibby. “In fact, experts predict that apartments will be the first real estate sector to bounce back when the economy recovers,” Bibby says.
NMHC 50 Owners Survey
Net sales among the top 50 owners greatly outpaced net acquisitions: sellers shed 98,919 apartments, while acquirers added 34,203. In fact, the four largest apartment owners all reduced their portfolios last year.
The biggest net seller was AIMCO, which shed 25,750 apartments and now owns 133,200, its lowest number since 1998 and a decrease of more than 50 percent from its peak in 2004. The second largest seller was another real estate investment trust (REIT), Equity Residential, whose ownership portfolio declined by 11,272 apartments. Equity now owns 40 percent fewer apartments than it did at its peak in 2000.
Six of the 10 largest apartment owners are now affordable housing providers: Boston Capital (No. 1); SunAmerica Affordable Housing Partners (No. 2); PNC Tax Credit Capital (No. 5); National Equity Fund (No. 6); Enterprise Community Investment (No. 7); and The Richman Group Affordable Housing Corporation (No. 8).
Total apartment holdings by REITs continued to slip. There are 10 REITs among the top 50 owners, one less than last year and down from a peak of 14 in 2005.
Both the ownership and management lists underscore the importance of medium-sized firms to the apartment industry. Fully half the firms in the NMHC 50 own or manage at least 30,000, but fewer than 50,000 apartments.
A firm had to own 23,730 units to make the NMHC 50 owners list; the median owner has 42,962 units.
As of Jan. 1, 2010, the top 50 apartment owners held 2.72 million apartments, or 14.6 percent of the nation’s estimated 18.6 million apartments.
There were six new firms added to the NMHC 50 owners list this year: Invesco Real Estate (No. 20); Raymond James Tax Credit Funds (No. 23); Irvine Company Apartment Communities (No. 26); Crow Holdings (No. 27); Concord Management (No. 36); and AEW Capital Management (No. 42).
NMHC 50 Managers Survey
In line with the sizable reductions in their ownership portfolios, AIMCO and Equity Residential downsized their management portfolios by 25,750 and 11,272 units, respectively.
By contrast, Greystar for the second year in a row had the largest portfolio growth, increasing the number of apartments under management by 13,819.
The NMHC 50 apartment managers operate 2.69 million apartments, or 14.5 percent of the nation's estimated 18.6 million apartments.
The number of apartments included in the NMHC 50 managers list rose by 0.8 percent in 2010 to 2,689,719, the second highest level in the survey’s history.
A firm had to manage 26,845 apartments to make the NMHC 50 managers list; the median manager controls 37,767 units.
Eight new firms joined the NMHC 50 managers list this year: Irvine Company Apartment Communities (No. 28); Concord Management (No. 36); Asset Plus Companies (No. 38); The Bozzuto Group (No. 40); The Laramar Group (No. 43); American Campus Communities Inc. (No. 44); McKinley (No. 45); and Edgewood Management Corporation (No. 50).
A complete analysis of the results is available at www.nmhc.org/goto/Top50 or call 202/974-2300.