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2002 NMHC 50 - National Multifamily Housing Council
A Special Supplement to National Real Estate Investor N M H C50 NATIONAL REAL ESTATE INVESTOR is pleased to present Group Editorial Director | Geoffrey C. Lewis | 212.462.3588 Editor | Matt Valley | 770.618.0215 [email protected] Managing Editor | Steve Webb | 770.618.0253 [email protected] Senior Associate Editor | Stephen Ursery | 770.618.0216 [email protected] Associate Editor, New York | Cristina Gair | 212.462.3645 [email protected] Associate Editor | Jessica Miller | 770.618.0133 [email protected] Graphic Design | Kathryn Burton | 770.618.0196 [email protected] Promotions Manager | Jean Estevez Production Manager | Ling Hamilton Editorial Reprints | 913.341.1300 PRIMEDIA BUSINESS MAGAZINES & MEDIA Chief Executive Officer | Timothy M. Andrews President | Ron Wall Chief Operating Officer | Jack Condon Sr. Vice President, Business Development | Eric Jacobson Vice President, Content Licensing & Dev. | Andrew Elston Vice President of Marketing/Communications | Karen Garrison Director, Human Resources | Kurt Nelson President, New Media | Andy Feldman Vice President, Technology | Cindi Reding PRIMEDIA BUSINESS-TO-BUSINESS GROUP President and CEO | David G. Ferm Chief Creative Officer | Craig Reiss Design Director | Alan Alpanian PRIMEDIA INC. Chairman and CEO | Tom Rogers President | Charles McCurdy Vice Chairman | Beverly C. Chell FINANCIAL SERVICES GROUP National Real Estate Investor, Shopping Center World, Registered Rep., and Trusts & Estates Senior Vice President & General Manager, Financial Services Group | Warren Bimblick | 212.462.3592 [email protected] Publisher Real Estate Group | Jackie Kandell | 770.618.0105 [email protected] Associate Publisher National Real Estate Investor | Kristine K. Hoefer | 770.618.0387 [email protected] the 13th annual compilation of the NMHC 50, the National Multi Housing Council’s (NMHC) authoritative ranking of the nation’s 50 largest apartment owners and 50 largest apartment managers. Based in Washington, D.C., NMHC represents the interests of the larger and more prominent firms in the nation’s multifamily rental housing industry. NMHC provides leadership for the apartment industry on legislative and regulatory matters, advances research and the exchange of strategic business information, and promotes the desirability of apartment living. NMHC’s members are engaged in all aspects of the development and operation of apartment housing, including ownership, construction, management and financing of such communities. The NMHC 50 has identified key trends in apartment ownership and management, becoming the definitive source for such information. To ensure the 2002 NMHC 50 is as complete and accurate as possible, NMHC staff gathered names of apartment owners and managers from a wide range of sources. A senior officer from each firm was contacted for the information included in the rankings, which are for properties owned or managed on January 1, 2002. Although membership in NMHC is not required for inclusion in the survey, 83% of the firms appearing in this year’s rankings are NMHC members. NMHC expresses appreciation to the industry leaders for their participation in this annual effort. The NMHC 50 was compiled and analyzed by NMHC staff members Doug Bibby, Doris Collins, Jill Meron and Mark Obrinsky. The NMHC 50 tallies rental apartments including rental housing for seniors. Condominiums and cooperatives are excluded, as are hotel rooms, nursing homes, hospital rooms and mobile homes. Pension fund advisory firms are listed only if they have direct ownership interests (as opposed to interests as fiduciaries) or serve directly as property managers. In addition to the rankings and analysis of the results, this section includes a listing of the officers and members of NMHC. Staff biographies round out the section. For those interested in joining the apartment industry’s leadership, NMHC welcomes inquiries to its Washington offices at (202) 974-2300, or you can visit NMHC’s web site at www.nmhc.org. NMHC 1 A Special Supplement to National Real Estate Investor 2002 OWNERSHIP National Multi Housing Council 50 (50 Largest U.S. Apartment Owners as of January 1, 2002) 2002 2001 Rank Rank Company Headquarters CEO Apartments With Ownership Interest 2002 2001 1 1 APARTMENT INVESTMENT AND MANAGEMENT COMPANY Denver, CO Terry Considine 251,201 265,620 2 3 RELATED CAPITAL COMPANY New York, NY Marc D. Schnitzer 246,918 160,860 3 2 EQUITY RESIDENTIAL PROPERTIES TRUST Chicago, IL Douglas Crocker, II 226,314 225,466 4 4 LEND LEASE REAL ESTATE INVESTMENTS Atlanta, GA Fred N. Pratt, Jr. 129,962 126,357 5 5 BOSTON CAPITAL Boston, MA John P. Manning 110,000 106,000 6 6 SUNAMERICA AFFORDABLE HOUSING PARTNERS, INC. Los Angeles, CA Michael L. Fowler 107,000 95,000 7 11 ARCHSTONE-SMITH Englewood, CO R. Scot Sellers 99,000 63,443 8 8 UNITED DOMINION REALTY TRUST, INC. Richmond, VA Thomas W. Toomey 77,567 79,065 9 7 WHITEHALL FUNDS New York, NY Daniel Neidich 76,000 84,000 10 10 LEFRAK ORGANIZATION, INC. Rego Park, NY Samuel J. LeFrak 71,000 69,000 11 12 SENTINEL REAL ESTATE CORPORATION New York, NY John H. Streicker 62,737 62,549 12 9 Beverly Hills, CA Alan I. Casden 59,510 71,826 13 13 GE CAPITAL REAL ESTATE Stamford, CT Michael Pralle 54,726 52,500 14 17 ALLIANCE HOLDINGS, L.L.C. Chicago, IL Andrew W. Schor 52,691 45,652 15 14 CAMDEN PROPERTY TRUST Houston, TX Richard J. Campo 51,345 51,336 16 16 EDWARD ROSE BUILDING ENTERPRISES Farmington Hills, MI Sheldon Rose 48,078 46,959 17 15 HOME PROPERTIES Rochester, NY Norman Leenhouts/ Nelson Leenhouts 48,066 47,497 18 18 LINCOLN PROPERTY COMPANY Dallas, TX J. Timothy Byrne 47,691 44,702 19 -- Cleveland, OH Edward Chu 45,797 N/A 20 20 RICHMAN GROUP CAPITAL CORPORATION Greenwich, CT Richard P. Richman 42,526 38,272 21 21 AVALONBAY COMMUNITIES, INC. Alexandria, VA Bryce Blair 41,212 37,146 22 19 WALDEN Dallas, TX John B. Bartling 40,297 43,541 23 23 WACHOVIA SECURITIES TAX CREDIT INVESTMENTS Charlotte, NC Ken Thompson 37,254 36,333 24 22 MILSTEIN PROPERTIES New York, NY Howard P. Milstein 37,000 37,000 25 -- San Diego, CA Christopher E. Hashioka 36,500 N/A CASDEN PROPERTIES, INC. KEY GLOBAL CAPITAL FAIRFIELD RESIDENTIAL, L.L.C. 2 NMHC A Special Supplement to National Real Estate Investor N M H C50 2002 Rank 2001 Rank Company Headquarters CEO Apartments With Ownership Interest 2002 2001 26 24 FOREST CITY ENTERPRISES Cleveland, OH Charles A. Ratner 36,111 35,913 27 25 MID-AMERICA APARTMENT COMMUNITIES, INC. Memphis, TN H. Eric Bolton, Jr. 33,363 33,632 28 28 UBS REALTY INVESTORS, L.L.C. Hartford, CT James W. O’Keefe, Jr. 32,171 30,623 29 26 CRI, INC. Rockville, MD William B. Dockser 31,057 33,004 30 27 COLUMBIA HOUSING Portland, OR David Sebastian 31,000 31,166 31 29 POST PROPERTIES, INC. Atlanta, GA John A. Williams 30,897 30,247 32 31 COLSON & COLSON/HOLIDAY RETIREMENT CORPORATION Salem, OR William E. Colson 30,891 29,668 33 32 PRUDENTIAL REAL ESTATE INVESTORS Parsippany, NJ Bernard Winograd 30,626 28,413 34 33 WNC & ASSOCIATES, INC. Costa Mesa, CA Wilfred N. Cooper, Sr. 28,557 26,733 35 35 AMLI RESIDENTIAL PROPERTIES TRUST Chicago, IL Allan J. Sweet 27,258 26,147 36 38 GABLES RESIDENTIAL TRUST Atlanta, GA Chris D. Wheeler 26,860 24,774 37 37 SECURITY PROPERTIES, INC. Seattle, WA John M. Orehek 26,522 24,853 38 34 NORTHWESTERN MUTUAL Milwaukee, WI Ed Zore 25,843 26,161 39 42 RAYMOND JAMES TAX CREDIT FUNDS, INC. St. Petersburg, FL Ronald Diner 25,136 23,314 40 39 TRAMMELL CROW RESIDENTIAL Atlanta, GA J. Ronald Terwilliger 23,355 24,503 41 44 TVO REALTY PARTNERS Chicago, IL Wayne A. Vandenburg 23,302 23,250 42 -- PINNACLE REALTY MANAGEMENT COMPANY Seattle, WA Stan J. Harrelson 23,168 11,460 43 46 SOUTHERN MANAGEMENT CORPORATION Vienna, VA David H. Hillman 22,600 22,477 44 50 WESTDALE ASSET MANAGEMENT Dallas, TX Joseph G. Beard 22,553 20,956 45 -- CLK MANAGEMENT CORPORATION Great Neck, NY Craig Koenigsberg 22,153 N/A 46 -- IRVINE APARTMENT COMMUNITIES Newport Beach, CA Max Gardner 22,045 19,912 47 36 KUSHNER COMPANIES Florham Park, NJ Charles Kushner 22,000 25,000 48 41 BERKSHIRE REALTY HOLDINGS, L.P. Boston, MA David J. Olney 21,960 23,812 49 47 CONAM GROUP OF COMPANIES San Diego, CA Daniel J. Epstein 21,800 22,000 50 45 BH MANAGEMENT SERVICES, INC. Dallas, TX Harry Bookey 21,626 22,786 NMHC 3 A Special Supplement to National Real Estate Investor 2002 MANAGEMENT National Multi Housing Council 50 (50 Largest U.S. Apartment Managers as of January 1, 2002) 2002 2001 Rank Rank Company Headquarters CEO Apartments With Management Interest 2002 2001 1 1 APARTMENT INVESTMENT AND MANAGEMENT COMPANY Denver, CO Terry Considine 303,805 325,094 2 2 EQUITY RESIDENTIAL PROPERTIES TRUST Chicago, IL Douglas Crocker, II 232,505 233,250 3 3 PINNACLE REALTY MANAGEMENT COMPANY Seattle, WA Stan J. Harrelson 113,546 108,356 4 4 LINCOLN PROPERTY COMPANY Dallas, TX J. Timothy Byrne 103,255 100,371 5 6 ARCHSTONE-SMITH Englewood, CO R. Scot Sellers 103,000 63,443 6 5 UNITED DOMINION REALTY TRUST, INC. Richmond, VA Thomas W. Toomey 77,567 75,165 7 8 TRAMMELL CROW RESIDENTIAL Atlanta, GA J. Ronald Terwilliger 65,409 60,324 8 7 SENTINEL REAL ESTATE CORPORATION New York, NY John H. Streicker 62,737 62,549 9 15 WHITEHALL FUNDS New York, NY Daniel Neidich 58,000 44,000 10 13 ALLIANCE HOLDINGS, L.L.C. Chicago, IL Andrew W. Schor 52,691 45,652 11 9 Houston, TX Richard J. Campo 52,650 51,828 12 10 HOME PROPERTIES Rochester, NY Norman Leenhouts/ Nelson Leenhouts 49,734 50,500 13 -- San Diego, CA Christopher E. Hashioka 49,230 N/A 14 11 CONAM GROUP OF COMPANIES San Diego, CA Daniel J. Epstein 48,000 47,500 15 14 EDWARD ROSE BUILDING ENTERPRISES Farmington Hills, MI Sheldon Rose 45,820 44,701 16 18 GABLES RESIDENTIAL TRUST Atlanta, GA Chris D. Wheeler 45,267 41,325 17 20 AVALONBAY COMMUNITIES, INC. Alexandria, VA Bryce Blair 41,589 37,779 18 19 LEFRAK ORGANIZATION, INC. Rego Park, NY Samuel J. LeFrak 40,657 38,657 19 16 WALDEN Dallas, TX John B. Bartling 40,297 43,541 20 -- Boston, MA Samuel Ross 38,462 15,635 21 21 GREYSTAR REAL ESTATE PARTNERS, L.L.C. Charleston, SC Robert A. Faith 37,215 37,663 22 22 MILSTEIN PROPERTIES New York, NY Howard P. Milstein 37,000 37,000 23 23 WESTDALE ASSET MANAGEMENT Dallas, TX Joseph G. Beard 36,993 36,725 24 24 MID-AMERICA APARTMENT COMMUNITIES, INC. Memphis, TN H. Eric Bolton, Jr. 33,363 33,632 25 26* ASSOCIATED ESTATES REALTY CORPORATION Richmond Heights, OH Jeffrey I. Friedman 31,350 32,124 CAMDEN PROPERTY TRUST FAIRFIELD RESIDENTIAL, L.L.C. WINNRESIDENTIAL *Due to a miscommunication, Associated Estates Realty Corporation was omitted from the 2001 NMHC 50. They would have been #26 on the Top 50 apartment managers list. 4 NMHC A Special Supplement to National Real Estate Investor N M H C50 2002 Rank 2001 Rank Company Headquarters CEO Apartments With Management Interest 2002 2001 26 25 LANE COMPANY Atlanta, GA George H. Lane, III 31,290 33,615 27 12 POST PROPERTIES, INC. Atlanta, GA John A. Williams 30,897 46,896 28 26 COLSON & COLSON/HOLIDAY RETIREMENT CORPORATION Salem, OR William E. Colson 30,891 31,428 29 30 LEDIC MANAGEMENT GROUP, INC. Memphis, TN L. Brent Garrett 29,964 27,797 30 -- LEGACY PARTNERS Foster City, CA C. Preston Butcher 29,333 15,343 31 29 VILLAGE GREEN COMPANIES Farmington Hills, MI Jonathan Holtzman 29,000 28,000 32 31 AMLI RESIDENTIAL PROPERTIES TRUST Chicago, IL Allan J. Sweet 28,132 27,358 33 32 JPI COMPANIES Irving, TX J. Frank Miller, III 27,665 27,000 34 -- SECURITY PROPERTIES, INC. Seattle, WA John M. Orehek 26,522 N/A 35 28 BERKSHIRE REALTY HOLDINGS, L.P. Boston, MA David J. Olney 25,245 30,327 36 -- ALLIANCE RESIDENTIAL COMPANY Phoenix, AZ Bruce C. Ward 25,136 N/A 37 33 FOREST CITY ENTERPRISES Cleveland, OH Charles A. Ratner 25,047 25,319 38 37 SIMPSON HOUSING, L.P. Denver, CO J. Robert Love 24,747 23,645 39 44 GRENADIER REALTY CORPORATION Brooklyn, NY Felice L. Michetti 24,649 22,153 40 42 FPI MANAGEMENT, INC. Sacramento, CA Dennis Treadaway 24,357 22,512 41 38 TVO REALTY PARTNERS Chicago, IL Wayne A. Vandenburg 24,147 23,299 42 41 BH MANAGEMENT SERVICES, INC. Dallas, TX Harry Bookey 23,631 22,786 43 35 CASDEN PROPERTIES, INC. Beverly Hills, CA Alan I. Casden 23,009 24,169 44 -- SHELTER GROUP, L.L.C. Baltimore, MD Arnold I. Richman 22,670 N/A 45 43 SOUTHERN MANAGEMENT CORPORATION Vienna, VA David H. Hillman 22,600 22,477 46 47 DRUCKER & FAULK, L.L.C. Newport News, VA John A. Munick, Jr. 22,305 21,019 47 17 WESTERN NATIONAL GROUP Irvine, CA Michael K. Hayde 22,238 42,005 48 45 KUSHNER COMPANIES Florham Park, NJ Charles Kushner 22,000 22,000 49 -- CORCORAN JENNISON COMPANIES Boston, MA Marty Jones 21,943 14,648 50 -- PICERNE REAL ESTATE GROUP Warwick, RI Ronald R.S. Picerne 21,105 20,104 NMHC 5 N M H C50 A Special Supplement to National Real Estate Investor NMHC 50 Shows Consolidation Advance Despite Downturn by Mark Obrinsky, vice president of research and chief economist/National Multi Housing Council THE OPERATING ENVIRONMENT FOR APARTMENTS changed substantially last year — from the end of the nation’s longest economic expansion to the dislocation and uncertainty caused by the terrorist attacks of September 11th and their aftermath. Although new construction only slipped a little from the previous year’s level, occupancy rates edged down, rent growth slowed, and in the last quarter of the year, rent concessions became prevalent in markets around the country. Even so, the longer-term trend toward consolidation in the industry remains intact, as evidenced in the NMHC 50, the annual listing of the nation’s largest apartment companies. In fact, the pace of consolidation picked up, both in ownership and management, from the previous year’s rate. While much of this trend was incremental, fueled by acquisitions of properties, some significant company acquisitions did occur.1 While only a handful of newcomers appear in the ownership rankings, seven firms appear in the management list for the first time. Despite the challenging economic times, the 50 largest apartment owners still managed to increase their holdings by 6% compared with last year’s survey. This is considerably higher than the 3% growth rate of last year’s survey, though below the average of the prior three years. As of January 1, 2002, the top 50 owners had an ownership interest in 2.77 million apartments, approximately 17% of the total national stock.2 Portfolio growth was stronger in the top 25 firms, but unlike last year’s survey the second 25 also gained in size. REITs hold two of the top three places in the ownership rankings, but overall there are fewer REITs on this year’s list — only 11 public REITs made the NMHC 50 ownership 1 2 3 list, down from 13 last year and from 16 in 2000. Public REITs now account for 33% of the total holdings of the NMHC 50, down from a peak of 40% two years ago. The 50 largest apartment managers grew by almost 4% compared with last year’s survey — slower growth than the owners, but a rebound from last year’s list, which featured essentially no change in the number of apartments managed by the top 50 firms. The managers in this year’s NMHC 50 manage 2.44 million apartments, approximately 15% of the nation’s total apartment stock. Although the list of top apartment managers is dominated by firms who are also among the top apartment owners, there still are many property management specialists in the management portion of the NMHC 50. In addition, a number of firms appear on both lists, but manage far more apartments than they own. APARTMENT OWNERS The leaders Apartment Investment and Management Company (AIMCO) retained the top spot in the NMHC 50 owners list with an ownership interest in 251,201 apartment units. After a year of strong growth, Related Capital moved up to the second spot with 246,918 units, an increase of more than 86,000 units from last year.3 To put this in perspective, Related added almost as many apartments to their portfolio as the combined portfolios of the four firms at the bottom of the list. Equity Residential, which increased its ownership by less than 1,000 units, Note that the acquisition of Casden Properties by Apartment Investment and Management Company (AIMCO) did not close by January 1, 2002, hence is not reflected in this year’s NMHC 50. The apartment stock is defined as the total number of apartments in structures with at least five units. As with AIMCO, the figure for Related Capital includes both full and partial ownership interests. 6 NMHC A Special Supplement to National Real Estate Investor slipped to No. 3 in the rankings, though it remains the top publicly traded REIT when measured by total capitalization. (See discussion below.) Lend Lease Real Estate Investments and Boston Capital round out the top five, as they did last year. Each added upwards of 4,000 apartments to its portfolio. firms are new additions to the NMHC 50 list of apartment owners. Key Global Capital debuts in the No. 19 slot, with an ownership interest in close to 46,000 apartments. Fairfield Residential, an apartment developer with properties in most regions of the country, is the 25th largest owner this year. Pinnacle Realty Management, long a mainstay among the top managers, joins the ranks of the top owners for the first time at the No. 42 position. Finally, CLK Management, which more than doubled its ownership portfolio, rounds out the list of newcomers at the No. 45 slot. Rising Stars Related Capital showed the largest increase in apartments owned by any firm that was in the NMHC 50 in both 2001 and 2002. Indeed, its gain of more than 86,000 apartments dwarfed all other portfolio increases. Largely as a result of its merger with Charles E. Smith Residential, Archstone Communities, now called Archstone-Smith, added more than 35,000 apartments. Archstone-Smith also was the second-biggest mover within the rankings, jumping four places to the No. 7 position. Westdale Asset Management, previously at the very bottom of the NMHC 50, leaped six places to the No. 44 slot. The rest of the top 10 also are familiar companies. SunAmerica Affordable Housing Partners increased its holdings by 12,000 apartments to solidify its hold on the No. 6 slot. Archstone-Smith, formed by the merger of two public REITS, Archstone Communities (the No. 11 firm last year) and Charles E. Smith Residential Realty (last year’s No. 30), takes over the No. 7 position. United Dominion Realty Trust, another REIT, remains in the No. 8 position. Whitehall Funds (an affiliate of Goldman Sachs) and Lefrak Organization round out the top 10. The newcomers One of the hallmarks of the apartment industry in recent years has been its stability. This continues to be evident in the small number of firms appearing in the top 50 list for the first time. For 2002, only four 8 NMHC A Special Supplement to National Real Estate Investor REITs in the rankings For the second straight year, publicly traded REITs significantly outperformed the overall stock market. Notwithstanding this record, equity capital remained scarce, and acquisitions of properties often were funded by dispositions of other properties, putting a lid on overall growth among public REITs. This year’s NMHC 50 contains only 11 public REITs, down from 13 last year and from 16 in 2000. BRE Properties, which was the No. 43 firm in last year’s listing, decreased its portfolio to 20,419 apartments in the past year. As a result, it slipped from the top 50. The merger of Archstone and Charles E. Smith eliminated another REIT from the rankings. The combined holdings of public REITs in the NMHC 50 decreased by more than 24,000 apartments. After rapid growth in the 1990s, public REITs among the NMHC 50 held over one million apartments in 2000. The last two years have seen a decrease of 10% from the 2000 listing. Keep in mind a few accounting points regarding the REIT figures shown above. In particular, the REIT numbers in the NMHC 50 do not include private REITs that are established within larger business organizations. The figures also do not include publicly traded companies in the NMHC 50 that have not elected REIT status. Finally, to permit comparisons with the portfolios of non-REIT owners, the NMHC 50 ranks by number of apartments in which the entity has an ownership interest. This gives a different ranking for apartment REITs than would result from alternative size measures, such as the companies’ capitalization. The accompanying box discussion compares the rankings by both measures—units owned and market capitalization. SIZING the APARTMENT REITS The NMHC 50 ranks apartment owners by the number of apartments in which they hold an Properties and Gables Residential Trust. The differences between the two rankings full ownership of only approximately 25% of its apartments and a less-than-half-ownership ownership interest. For the majority of companies have several explanations. The most important interest in approximately 42% of its holdings. in the listing, this is the only measure of size that difference has to do with partial ownership of is both consistent and generally available. apartments. In addition to being the sole owner rankings include: (1) differences in apartment Other reasons for differences between the of thousands of apartments, some companies value among companies based on apartment total market capitalization. As with other publicly have partial ownership interest in others, typically quality or geography; (2) differences in the traded companies, size can be estimated by the through involvement in a partnership, as either investor assessments of the quality and stability stock market’s valuation of the company’s equity the general partner or a limited partner. of current income as well as the growth Publicly traded REITs also can be measured by and the book value of its debt. While this ownership interest may be as small prospects for the company; and (3) differences as 1%, the apartments are tabulated by NMHC as in portfolio holdings of assets other than specialists, and the majority of their assets are if they were fully owned by the REIT. By contrast, apartments, including both hard assets and apartments. Hence, their market capitalization is the valuation measure effectively adjusts for the valuation of contracts for third-party a useful and consistent measure of the market’s the extent of ownership. Notably, AIMCO has management of apartments owned by others. All of the REITs in the NMHC 50 are apartment valuation of the companies’ apartment business. The accompanying table ranks the publicly traded REITs in the NMHC 50 ownership list by the number of units they own. It also shows both their total market capitalization and their ranking by that standard. There are several notable differences in the rankings. AIMCO, which holds the top position in the NMHC 50, has an ownership interest in 11% more apartments than does Equity Residential Properties Trust. However, when measuring by total market valuation, Equity Residential is 67% larger. The other REITs whose market value rank is higher than their units-owned rank are AvalonBay, Post 10 NMHC A Special Supplement to National Real Estate Investor Industry growth and concentration The trend toward consolidation remains intact in the nation’s apartment industry. The number of apartments owned by the NMHC 50 grew by 6.3% compared with last year’s listing. Though slower than the 9% to 11% growth range of the 1998-2000 listings, it is a rebound from the 2.9% pace recorded in last year’s survey. It also is on par with the average growth rate of the last 7 years. Growth tended to be top-heavy: Holdings of the top 10 firms increased by 8.7% compared with last year. Meanwhile, portfolios of the top 25 grew by 7.2%, and growth among the second 25 firms was 3.5%. The threshold for entry into the NMHC 50 edged up from 20,956 to 21,626. The share of the apartment market owned by the NMHC 50 increased as well. The 10 largest firms have an ownership interest in 8.6% of the total stock of rental apartments in buildings with at least five units—estimated by NMHC at almost 16.2 million units. The top 25 firms own 13.0% of the apartment stock, while the NMHC 50 combined hold 17.1% of all apartments, up a full percentage point from last year’s share. All of these figures are record highs. Its management portfolio still exceeds its ownership portfolio by more than 52,000 units, indicating it still manages some apartments for other owners. Equity Residential Properties Trust, which manages few properties outside its own portfolio, easily retained its No. 2 position. Pinnacle Realty Management Company and Lincoln Property Company are again in the No. 3 and No. 4 slots, respectively, while Archstone-Smith moved up a notch to the No. 5 position. Whitehall Funds and Alliance Holdings joined the list of apartment managers in the top 10 for the first time. The newcomers Seven companies are new to this year’s top 50 ranking of apartment managers. Fairfield Residential, which manages 49,230 apartments, joins the list in the No. 13 position. The firm also is a new member of the NMHC 50 ownership list. WinnResidential more than doubled its management portfolio to 38,462 units, good enough for 20th place. Associated Estates Realty, a publicly traded REIT, added almost 20,000 apartments to its management total, moving it into the No. 25 slot. Well-known developer Legacy Partners, with 29,333 apartments under management, debuts at the No. 30 slot. Security Properties (No. 34), Alliance Residential (No. 36), and Shelter Development (No. 44) round out the newcomers list. APARTMENT MANAGERS The list of top apartment managers includes many of the nation’s largest apartment owners who also self-manage their own properties. Hence, they appear on both the top 50 owners and top 50 managers lists. Other firms specialize in property management and provide this service to apartment owners, including some of those in the NMHC 50 owners list. The leaders AIMCO remains at the top of the NMHC ranking of the nation’s largest apartment managers, even though it scaled back its third-party apartment management. 12 NMHC A Special Supplement to National Real Estate Investor Rising stars of management The biggest increase among management portfolios was posted by Archstone-Smith, largely by virtue of its merger with Charles E. Smith Residential. Whitehall Funds, whose portfolio grew by 14,000 apartments, made the biggest jump in rank, moving up 6 slots to No. 9. Alliance Holdings, like Whitehall, was among the leaders in both portfolio growth and jump in rank. Pinnacle Realty and Trammell Crow Residential were among the top portfolio growers for the second straight year. Apartment management growth and concentration The top 50 management companies manage a combined 2,438,665 apartments, an increase of 3.7% from last year’s listing. In contrast to the owners’ growth, which was concentrated at the top, the managers’ increase was spread broadly throughout the list. The top 10 increased their management portfolios by 3.7% compared with last year’s survey, the top 25 by 3.4%, and the second 25 by 4.5%. As expected, management concentration increased once again, following the one-time trend reversal of last year’s survey. The top 10 apartment managers now manage 7.2% of the nation’s apartments — an increase from last year, though still down slightly from 2000. The top 25 firms increased their management share to 11.1% of the apartment stock, a new record. And the top 50 management firms manage 15.1% of the nation’s apartments, also a new high. SPECIALISTS A total of 33 companies appear on both the lists of the top 50 owners and top 50 managers. Therefore, each list has 17 firms that do not appear on the other list. Many of these firms are actually involved in both ownership and management, but tend to specialize in one of these activ14 NMHC ities, hence do not reach the threshold needed to rank on both lists. The specialists include some of the biggest companies on the two lists. On the owners list, Related Capital, Lend Lease Real Estate Investments and Boston Capital are all among the top 5 owners, but do not appear on the management rankings. In the management portion of the NMHC 50, newcomer WinnResidential (No. 20) is the biggest firm that does not also appear on the top owner list. Pinnacle Realty Management, the third largest manager both last year and this year, was the top management specialist last year. This year, the company moved into the NMHC 50 ownership list, removing it from the ranks of specialists. Not surprisingly, some firms that appear on both the ownership and management NMHC 50 lists are more prominent in one ranking than the other. Companies whose ownership portfolios exceed their management portfolios by more than 25,000 apartments are: Casden and Lefrak Organization. Firms whose management portfolios exceed their apartment holdings by more than 25,000 units are: Pinnacle Realty, Trammell Crow Residential, Lincoln Property, AIMCO, and ConAm.
