Home > multifamily, Uncategorized > Selloffs, Tax Credits Shift Makeup of Top Apartment Owners

Selloffs, Tax Credits Shift Makeup of Top Apartment Owners

Affordable Housing Providers, in the Form of Tax Credit Syndicators, Climb to Top of List and Now Rank Among Largest Owners of Apartments

 The apartment industry staged a strong recovery from the Great Recession last year, 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 documents the apartment industry’s evolution over time and helps identify trends within the sector and up-and-coming new players.

“The recovery also spurred a rebound in apartment prices and transaction volume, which doubled to $31 billion,” said Mark Obrinsky, NMHC’s chief economist. “And apartment prices gained substantial ground in 2010 after having fallen by 30% 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 and now rank among 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. REITs 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 marked by diversifying 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.

Managers Make Gains
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 that 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.

Other highlights of this year’s owner survey include:

  • 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.
  • 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). And
  • As of Jan. 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.
Categories: multifamily, Uncategorized
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