Concentration in the management sector of the apartment industry changed dramatically in 2006, according to the National Multi Housing Council’s (NMHC) 18th annual ranking of the top 50 apartment owners and top 50 apartment managers. Over the past 10 years, most of the concentration documented in NMHC’s rankings has been among apartment owners, but this changed last year, with the emergence of a growing number of medium-sized and large firms among the nation’s apartment managers.

The share of apartments managed by the top 50 management firms rose by a record 8.3 percent to 2.6 million units, and the top 50 apartment management firms now oversee 14.7 percent of the nation’s 17.6 million apartments. Further demonstrating the change, the 18th annual rankings’ smallest NMHC top 50 apartment management firm is larger than 12 companies ranked in NMHC’s top 50 ownership firms. Companies were required to own 19,759 units to make the NMHC 50 owners list, but it took another 5,518 for a total of 25,277 units to make the NMHC 50 managers list.

According to Doug Bibby, NMHC president, the increasing concentration of apartment managers is the result of institutional owners being more comfortable with having a single firm manage all of their apartment buildings, and continued technology improvements—sophisticated management systems, online rent payment solutions and demand-based pricing models.

In stark contrast to the growing portfolios of the nation’s apartment managers, several of the largest apartment owners were substantial net sellers in 2006. The largest apartment owner in the country, Apartment Investment and Management Co. (AIMCO), slimmed down by 22,000 units. Last year’s number two firm, Equity Residential, followed suit with a 30,000-unit net reduction, pushing the firm into the number three spot this year.

The rankings also documented the decreasing role of real estate investment trusts (REIT) in the sector. The number of apartment REITs declined from a high of 14 to 12, as several have recently been taken private. For the third year in a row, apartment REITs as a whole were net sellers. REITs now own just 892,292 units, or 4.7 percent, of the total U.S. apartment stock, the lowest figure since 1998, and down from a peak of 6.4 percent.

A complete analysis of the results is available at www.nmhc.org/Top50/ListYears.cfm.

Infromation from: www.multi-housingnews.com

This entry was posted on Saturday, April 7th, 2007 at 12:04 am and is filed under Apartments. Tags: Doug Bibby Equity Residential National Multi Housing Council NMHC Real Estate real estate investment real estate investment trust Real estate investment trusts REIT REITs technology . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.