Apartment Owners Shrinking as Managers Grow?

The average portfolio size of the apartment industry's largest owners is declining, while concentrations among apartment management firms are growing, according to a survey by the National Multi Housing Council. Apartment Investment and Management Co., Denver, was the nation's largest apartment owner for the third year in a row in 2007, although it shed more than 14,000 units to fall below 200,000 for the first time since 1988, the annual NMHC rankings found. Equity Residential, the No. 4 owner, sold 11,500 units. Meanwhile, most of the top managers boosted their portfolio holdings, with Riverstone Residential Group, Dallas, adding 64,000 units for a 70% increase. "The apartment industry has historically been dominated by smaller local and regional firms, particularly in the area of property management," said NMHC president Doug Bibby. "But that is clearly changing, as we see the emergence of several powerful national property managers. These firms are using economies of scale to overcome thin margins and to refute the conventional wisdom about property management being a low-growth area." The trade group can be found online at http://www.nmhc.org.