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