Publications

- July 1, 2018: Vol. 30, Number 7

To read this full article you need to be subscribed to Institutional Real Estate Americas

Small is beautiful: How aggregating smaller multifamily properties allows institutions to tap into urban cores

by John Williams

Small multifamily properties tend to be overlooked by many institutional investors. A majority of properties of five to 49 units are typically owned by individuals rather than institutions, despite the fact 54 percent of unsubsidized renters live in complexes with 49 units or less. Meanwhile, 62 percent of renters living in subsidized multifamily units live in communities made up of 49 units or smaller.

Institutional investors tend to shy away from these more modest multifamily properties because financing for these properties is simply more expensive, and most of these smaller properties have higher operating costs, lower resident retention and, in many cases, deferred maintenance due to a lack of professional management. In densely populated areas, sizable markets of renters are seemingly untapped by institutional capital simply because of the sheer size of the apartment communities.

By implementing an aggregate strategy and acquiring a portfolio of small multifamily

Glossary, videos, podcasts, research in the Resource Center

Forgot your username or password?

Close your account?

Your account will be closed and all data will be permanently deleted and cannot be recovered. Are you sure?

We respect your privacy! Please give consent for processing data as described in our Privacy Policy