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A Special Supplement to National Real Estate Investor

NATIONAL MULTI HOUSING COUNCIL

THE NATION’S 50 LARGEST APARTMENT OWNERS AND 50 LARGEST APARTMENT MANAGERS

A speciAl supplement to nAtionAl reAl estAte investor

introduction ................................................................................ 42007 Apartment ownership ....................................................... 62007 Apartment management .................................................... 8nmHc 50: management concentration ratchets up ............... 10manhattan transfer: Blackrock realty’s Acquisition of landmark new York city Apartments ...................................... 16merchant Builder moves toward management: Jpi’s management portfolio Doubles .........................................18third-party powerhouse: riverstone residential Group’s rapid Growth ..........................................................................20Family Business: Family-run Firms thrive in an Apartment sector increasingly Dominated by large, public companies ....22nmHc officers ........................................................................24nmHc Board of Directors executive committee ......................24nmHc Board of Directors ........................................................29turning nimBYs into YimBYs: tools to Help You “Fight the Good Fight” .............................................................................44nmHc meetings 2007-08 ........................................................45nmHc Advisory committee .....................................................46nmHc Associate members ......................................................54

Contents

2 NMHC 50 April 2007

cover photo: Avalon del ray in marina del ray, cA. (AvalonBay communities)©steve Hinds photography



national real estate investor is pleased to present the 18th annual nmHc 50, the national multi Housing council’s authoritative ranking of the nation’s 50 largest apartment owners

and 50 largest apartment managers.Based in Washington, D.c., the national multi Housing council represents the apartment

industry and the 16 million households who live in apartments in the u.s. nmHc’s members are the principal officers of the larger and more prominent apartment firms and include owners, developers, managers, financiers and service providers. the council operates a joint legislative program with the national Apartment Association that targets such issues as housing policy, multifamily finance, environmental affairs, tax policy, fair housing, building codes, technology, human resources, and rent control. in addition, nmHc conducts apartment-related research, encourages the exchange of strategic business information, and promotes the desirability of apartment living. For nearly two decades, the nmHc 50 has identified key trends in apartment ownership and management, becoming the definitive source for such information.

to ensure the 2007 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, 2007. Although membership in the national multi Housing council is not required for inclusion in the survey, 92 percent 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.

For the purposes of the nmHc survey, investment fund managers are treated as owners only if they retain substantial equity in the apartment property or if they maintain effective respon-sibility and decision-making over the investment property. similarly, tax credit syndicators and franchisers are regarded as owners only if they retain a fiduciary responsibility. (When firms function strictly as advisers rather than investors, they are not regarded as owners.)

the nmHc 50 does not distinguish between partial and full ownership. some apartment firms own sizable apartment properties through joint ventures in which their share could range anywhere from 1 to 99 percent. others are primarily the sole owners of their apartments. in principle, it would be desirable to account for partial ownership—treating 50 percent ownership of 100 apartments as equivalent to full ownership of 50 units, for example. in practice, it is not feasible to make such distinctions.

the survey excludes condominiums, cooperatives, hotel rooms, nursing homes, hospital rooms, and mobile homes. rental housing for seniors (age-restricted apartments) is included, although assisted living and congregate care facilities are not. Finally, since we measure indus-try concentration by comparing the top 50 owners and managers against the nation’s entire apartment stock, only u.s. apartments are included.

the nmHc 50 was compiled and analyzed by nmHc staff members mark obrinsky and richard levy under the leadership of nmHc president Doug Bibby. in addition to the nmHc 50 rankings and analysis of the results, this section includes a listing of the officers and members of the national multi Housing council.

For those interested in joining the apartment industry’s leadership, nmHc welcomes inquiries to its Washington office at 202/974-2300, or you can visit nmHc’s web site at www.nmhc.org.

supplement design and layout: Katja l. Adams




2007 Apartment Ownership

APARTMENTS WITH 2007 2006 OWNERSHIP INTEREST RANK RANK COMPANY HEADQUARTERS CORPORATE OFFICER 2007 2006

NATIONAl MUlTI HOUSINg COUNCIl 50 (50 largest u.s. Apartment owners as of January 1, 2007)

1 1 Aimco Denver, co terry considine 211,800 233,738

2 3 mmA Financial, llc Baltimore, mD michael Falcone 177,062 179,133

3 2 equity residential chicago, il David J. neithercut 165,716 197,404

4 4 Boston capital Boston, mA Jack manning 156,758 147,000

5 5 sunAmerica Affordable Housing partners, inc. los Angeles, cA michael l. Fowler 145,224 143,702

6 6 Archstone-smith engelwood, co r. scot sellers 84,176 81,914

7 8 enterprise community investment, inc. columbia, mD Jeffrey H. Donahue 82,270 74,778

8 10 the richman Affordable Housing corporation Greenwich, ct richard p. richman 74,517 67,501

9 7 united Dominion realty trust, inc. littleton, co thomas W. toomey 70,339 74,875

10 12 Ge real estate stamford, ct michael pralle 67,561 57,366

11 13 pnc multiFamily capital portland, or Donald W. Giffen 64,013 57,232

12 11 camden property trust Houston, tX richard J. campo 63,843 65,580

13 14 edward rose Building enterprise Farmington Hills, mi Warren rose 53,195 52,237

14 21 American management services (dba pinnacle) seattle, WA stan Harrelson 50,514 41,457

15 16 Fairfield residential llc san Diego, cA christopher e. Hashioka 50,450 48,033

16 22 AvalonBay communities, inc. Alexandria, vA Bryce Blair 48,294 40,606

17 30 Blackrock realty Florham park, nJ Fred lieblich 48,135 32,635

18 19 lincoln property company Dallas, tX J. timothy Byrne 46,938 43,470

19 9* Wachovia charlotte, nc Brett smith 46,351 30,309

20 15 sentinel real estate corporation new York, nY John H. streicker 45,293 50,176

21 23 Wnc & Associates, inc. irvine, cA Wilfred n. cooper Jr. 44,644 40,541

22 17 Alliance Holdings, l.l.c. chicago, il Andrew W. schor 41,517 45,681

23 25 Forest city residential Group, inc. cleveland, oH ronald ratner 41,503 39,432

24 24 the michaels Development company marlton, nJ michael J. levitt 41,381 40,369

25 not ranked cnc investments ltd., llp Houston, tX charlie Yalamanchili 40,330 39,207

*Wachovia juxtaposed their ownership and management figures last year.

April 2007 NMHC 50 7


APARTMENTS WITH 2007 2006 OWNERSHIP INTEREST RANK RANK COMPANY HEADQUARTERS CORPORATE OFFICER 2007 2006

26 26 mid-America Apartment communities, inc. memphis, tn H. eric Bolton, Jr. 40,293 38,227

27 29 morgan stanley new York, nY John mack 40,281 33,845

28 not ranked Alliant capital, ltd. Woodland Hills, cA shawn Horwitz 40,000 38,425

29 28 picerne real estate Group Warwick, ri David r. picerne 38,979 36,759

30 20 Home properties, inc. rochester, nY edward J. pettinella 36,954 43,432

31 18 colonial properties trust Birmingham, Al c. reynolds thompson, iii 33,724 45,242

32 32 the irvine company Apartment communities irvine, cA max Gardner 32,716 29,239

33 31 Holiday retirement corp./colson & colson salem, or William e. colson 31,222 31,737

34 35 uBs realty investors llc Hartford, ct matthew lynch 30,118 28,000

35 34 the related companies new York, nY Jeff Blau 29,477 28,471

36 36 essex property trust, inc. palo Alto, cA Keith r. Guericke 27,570 26,587

37 not ranked BH management services, inc. Dallas, tX steven p. roach 27,191 24,582

38 not ranked lindsey management company, inc. Fayetteville, Ar James e. lindsey 25,508 24,956

39 42 Kushner companies Florham park, nJ charles Kushner 25,000 22,000

40 37 Westdale Asset management Dallas, tX Joseph G. Beard 24,841 25,968

41 38 Bre properties, inc. san Francisco,cA constance B. moore 24,838 24,440

42 44 madison Apartment Group philadelphia, pA Joseph F. mullen 24,186 21,737

43 39 southern management corporation vienna, vA David Hillman 23,471 23,471

44 47 trammell crow residential Atlanta, GA J. ronald terwilliger 22,749 21,223

45 33 Amli residential properties chicago, il Gregory t. mutz 22,276 28,659

46 40 northwestern mutual milwaukee, Wi edward J. Zore 22,196 23,444

47 43 post properties, inc. Atlanta, GA David p. stockert 21,745 21,791

48 45 security properties inc. seattle, WA John m. orehek 20,071 21,478

49 not ranked Berkshire property Advisors Boston, mA Frank Apeseche 20,062 12,710

50 46 milestone management Dallas, tX steve t. lamberti 19,759 21,365



1 2 Aimco Denver, co terry considine 209,412 191,951

2 1 equity residential chicago, il David J. neithercut 165,716 197,774

3 3 American management services (dba pinnacle) seattle, WA stan Harrelson 144,327 135,525

4 4 lincoln property company Dallas, tX J. timothy Byrne 126,104 112,928

5 11 cAs, riverstone/Banyan Dallas, tX and terry Danner/christine 91,250 55,000

6 5 Archstone-smith engelwood, co r. scot sellers 84,176 81,165

7 7 Greystar real estate partners, llc charleston, sc robert A. Faith 80,911 72,981

8 6 united Dominion realty trust, inc. littleton, co thomas W. toomey 70,339 74,708

9 30* Wachovia charlotte, nc Brett smith 69,558 70,429

10 9 Winncompanies Boston, mA samuel ross 65,087 61,427

11 8 camden property trust Houston, tX richard J. campo 64,063 65,800

12 10 Fairfield residential llc san Diego, cA christopher e. Hashioka 58,348 57,344

13 14 edward rose Building enterprise Farmington Hills, mi Warren rose 50,937 49,979

14 18 capstone real estate services, inc. Austin, tX James W. Berkey 50,597 42,102

15 19 AvalonBay communities, inc. Alexandria, vA Bryce Blair 48,294 40,606

16 42 Blackrock realty Florham park, nJ Fred lieblich 48,135 24,880

17 12 the conAm Group of companies san Diego, cA J. Bradley Forrester 46,501 52,600

18 13 sentinel real estate corporation new York, nY John H. streicker 45,293 50,176

19 23 Fpi management Folsom, cA Dennis treadaway 44,288 36,682

20 20 picerne real estate Group Warwick, ri David r. picerne 42,016 39,721

21 17 Alliance Holdings, l.l.c. chicago, il Andrew W. schor 41,517 45,681

22 29 the michaels Development company marlton, nJ michael J. levitt 41,381 32,285

23 26 Alliance residential company phoenix, AZ Bruce Ward 41,201 32,800

24 16 colonial properties trust Birmingham, Al c. reynolds thompson, iii 40,571 46,920

25 21 mid-America Apartment communities, inc. memphis, tn H. eric Bolton, Jr. 40,293 38,227

2007 2006 APARTMENTS MANAgED RANK RANK COMPANY HEADQUARTERS CORPORATE OFFICER 2007 2006

NATIONAl MUlTI HOUSINg COUNCIl 50 (50 largest u.s. Apartment managers as of January 1, 2007)

2007 Apartment Management

rockville, mD Freeland/lou vogt

*Wachovia juxtaposed their ownership and management figures last year.



2007 2006 APARTMENTS MANAgED RANK RANK COMPANY HEADQUARTERS CORPORATE OFFICER 2007 2006

26 22 Westdale Asset management Dallas, tX Joseph G. Beard 39,727 37,758

27 15 Home properties, inc. rochester, nY edward J. pettinella 39,136 47,001

28 not ranked cnc investments ltd., llp Houston, tX charlie Yalamanchili 39,016 39,369

29 not ranked Jpi companies irving, tX J. Frank miller iii 37,345 11,604

30 24 Gables residential trust Atlanta, GA David Fitch 37,156 36,309

31 27 BH management services, inc. Dallas, tX steven p. roach 32,724 32,798

32 28 Holiday retirement corp./colson & colson salem, or William e. colson 32,403 32,770

33 32 the irvine company Apartment communities irvine, cA max Gardner 32,218 29,239

34 35 rAm partners, llc Atlanta, GA Bill leseman 30,565 28,591

35 40 the lynd company san Antonio, tX Adam David lynd 30,308 25,413

36 25 village Green companies Farmington Hills, mi Jonathan Holtzman 30,300 33,500

37 not ranked Forest city residential Group, inc. cleveland, oH ronald ratner 30,016 21,281

38 not ranked steven D. Bell & company Greensboro, nc steven D. Bell 29,754 17,931

39 34 the related companies new York, nY Jeff Blau 29,541 28,811

40 41 sawyer realty Holdings llc needham, mA David m. rosenberg 29,280 25,279

41 not ranked milestone management Dallas, tX steve t. lamberti 29,088 4,431

42 38 lane company Atlanta, GA William H. Donges 28,249 26,756

43 44 Ambling companies, inc. and affiliates valdosta, GA michael H. Godwin 28,231 24,459

44 39 essex property trust, inc. palo Alto, cA Keith r. Guericke 27,723 26,195

45 not ranked realty management, inc. las vegas, nv Dan K. shaw 27,339 25,692

46 36 Drucker & Falk, llc raleigh, nc Kellie Falk-tillett 27,099 28,307

47 49 Western national property management irvine, cA michael K. Hayde 26,596 22,816

48 33 leDic management Group memphis, tn pierce ledbetter 26,014 29,228

49 not ranked lindsey management company, inc. Fayetteville, Ar James e. lindsey 25,780 25,224

50 43 edgewood management corporation silver spring, mD Jack H. murray 25,277 24,660



APARTMENT OWNERSHIP

THE lEADERSThis year’s top 10 list is little changed from last year’s.

Apartment Investment and Management Company

(AIMCO) remains in the No. 1 position even though

it was a substantial net seller for the third consecutive

year. Even with almost 22,000 fewer units than a year

ago, AIMCO remains the only firm with more than

200,000 apartments owned. Last year’s No. 2 firm,

Equity Residential, was an even bigger net seller,

slimming down by more than 30,000 units and slip-

ping a notch into third place. MMA Financial moved

up to the No. 2 slot, despite being a small net seller

itself. Both Boston Capital and SunAmerica were net

NMHC 50:management concentration ratchets up

OvERvIEW

last year featured continued improvement in market fundamentals for the apartment industry. Job growth continued to send more renters in

the “front door,” while higher housing prices limited the number leaving through the “back door” to buy a house. continued positive demograph-ics—especially young people just entering the housing market—com-bined with new immigrants to produce a strong year on most fronts. the pickup in demand along with a steady pace of new construction in most markets led to firmer occupancy rates and better rent growth.

With the apartment industry solidly in the expansion phase of its cycle, one might expect relatively minor changes among the top players. on the ownership side, that was largely true in 2006. But the manage-ment side saw one noteworthy change: a significant ratcheting-up of industry concentration.

the nmHc 50 rankings have long been used to measure concentration in the apartment sector. over the past 10 years, most of that concen-tration has been seen on the ownership side, with the emergence of a growing number of medium-to-large firms owning a growing share of the nation’s apartment supply. the same had not been the case previously for the management side of the sector.

in 2006, the concentration of management changed dramatically. the number of apartments managed by the nmHc 50 firms rose by 8.3 percent to a record of nearly 2.6 million units or 14.7 percent of the nation’s 17.6 million apartments. By comparison, the number of apart-ments owned by the nmHc 50 owner firms rose just 0.8 percent, to nearly 2.7 million or 15.2 percent of the nation’s estimated 17.6 million apartments. this is the smallest differential between the two shares in eight years. From 1999–2005, the portfolios of the 50 largest owners grew faster than the portfolios of the 50 largest apartment managers so that in 2005, the owner portfolios exceeded the manager portfolios by more than a half million apartment units. management firms have

played catch-up the last two years, reducing the disparity to just over 85,000 units.

on the management side, increasing size was evident throughout the top 50 list. there were twice as many firms that increased the number of units they manage than decreased them (29 to 14). What’s more, the average gain (among firms that added management units) was 6,543, while the average reduction (among firms that shed units from their management portfolios) was only 5,461.

on the ownership side, firms of increasing size are mainly seen in the middle and lower part of the rankings. While it’s true that there were more net acquirers than net sellers on the ownership side as well (29 to 16), the average net pickup was only 4,587 apartments, considerably smaller than the average net disposition of 6,334 units.

A firm had to own 19,759 units to make the nmHc 50 ownership list, but it took another 5,518 units for a total of 25,277 to make the nmHc 50 management list. in fact, the portfolio of the smallest firm on the management list exceeds the portfolios of 12 of the firms on the owner-ship list. Finally, the median size of both owner and manager portfolios of firms among the top 50 topped 40,000 for the first time—the median owner has 40,312 units, while the median manager portfolio is 40,010.

By Mark Obrinsky, vice president of research and chief economist, national multi Housing council

NMHC 50 PROFIlE 2007Portfolio Size:no. of Apartments owned 2,667,051no. of Apartments managed 2,581,200

Minimum Entry Threshold:no. of Apartments owned 19,759no. of Apartments managed 25,277

TOP 10 APARTMENT OWNER FIRMSRank Company No. of

Apartments with Ownership Interest

1 Apartment investment and management company 211,8002 mmA Financial 177,0623 equity residential 165,7164 Boston capital 156,7585 sunAmerica Affordable Housing partners 145,2246 Archstone-smith 84,1767 enterprise community investment, inc. 82,2708 the richman Affordable Housing corporation 74,5179 united Dominion realty trust, inc. 70,33910 Ge real estate 67,561



buyers and retain the No. 4 and No. 5 positions, respectively.

The next four firms in the rankings are all repeat perform-

ers on the top 10 list as well. In fact, the only new firm atop the

ownership “leader board” is GE Real Estate, whose net acquisi-

tion of more than 10,000 apartments allowed it to just edge out

PNC for the No. 10 position. Other than the three largest firms,

only United Dominion was a net seller; the rest of the top 10

companies chose to add to their portfolios.

THE NEWCOMERSThere are five newcomers among this year’s NMHC 50 owners.

With 40,330 units, CnC Investments was the highest ranked

new entrant at No. 25. Alliant Capital, with 40,000 apartments,

was not far behind at No. 28. Rounding out the newcomers were

BH Management Services (No. 37), Lindsey Management (No.

38), and Berkshire Property Advisors (No. 49). For both BH

Management and Berkshire Property, 2007 marks a return to the

ownership list after a four-year absence. In total, the newcomers

accounted for 5.7 percent of the units held by the top 50 owners.

RISINg STARSAmong the firms on the NMHC 50 ownership list both last year

and this year, five firms—all among the top 25 in the owner

rankings—showed especially large increases in the number of

apartments owned. Wachovia (No. 19) had the biggest net pick-

up, upping its portfolio by 16,042 units. BlackRock Realty (No.

17), among the biggest gainers last year, was close behind, with

a pickup of 15,500 units (see sidebar). GE Real Estate (No. 10)

added 10,195 apartment residences to its portfolio. Rounding

out the top five in units gained were two other familiar names.

Boston Capital, the No. 4 firm among owners, and American

Management Services (dba Pinnacle), the No. 14 firm, were

both “rising stars” last year, and their net increases of just under

10,000 units gained them the same status this year.

In terms of the rankings, BlackRock made the biggest leap,

rising 13 slots into the No. 17 position. Last year’s biggest mover,

American Management Services, posted the second largest

gain, rising another 7 slots to No. 14. AvalonBay Communities,

continuing to increase its portfolio through its internal devel-

opment pipeline, rose 6 slots into the No. 16 position. Finally,

Kushner Companies and Trammell Crow Residential both

moved up 3 slots, to No. 39 and No. 44, respectively.

REITS IN THE RANKINgSWith the acquisition of AMLI Residential Properties by Morgan

Stanley, the NMHC 50 ownership list lost one more REIT,

reducing their number to 12. Five REITs added to their owner-

ship portfolios over the last year, led by AvalonBay’s 7,688-unit

increase. Both Archstone-Smith and Mid-America Apartment

Communities saw net portfolio increases of more than 2,000,

while Essex and BRE undertook much smaller gains. By con-

trast, the two largest firms (AIMCO and Equity Residential)

engaged in substantial net dispositions, dropping a combined

53,626 units. Colonial Properties and Home Properties were

also sizable net sellers.

As a result, the total number of apartments owned by REITs

in the NMHC 50 fell to 829,292. This is a 10 percent drop from

last year and the smallest total since 1998. The REIT share of

the total U.S. apartment stock fell to 4.7 percent, also the lowest

figure since 1998.

Three points of clarification are in order here. First, the REIT

numbers in the NMHC 50 do not include private REITs that are

part of larger business organizations. Second, 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 sidebar discus-

sion compares the rankings by both measures—units owned

and market capitalization.

APARTMENT OWNERSlargest Portfolio growth ApartmentsWachovia 16,042Blackrock realty 15,500Ge real estate 10,195Boston capital 9,758American management services (dba pinnacle) 9,057

Moving Up in Rank SlotsBlackrock realty +13American management services (dba pinnacle) +7AvalonBay communities, inc. +6Kushner companies +3trammell crow residential +3

PUblIClY TRADED REITs AMONg TOP APARTMENT OWNERSRank Company No. of

Apartments with Ownership Interest

1 Apartment investment and management company 211,8003 equity residential 165,7166 Archstone-smith 84,1769 united Dominion realty trust, inc. 70,33912 camden property trust 63,84316 AvalonBay communities, inc. 48,29426 mid-America Apartment communities, inc. 40,29330 Home properties, inc. 36,95431 colonial properties trust 33,72436 essex property trust, inc. 27,57041 Bre properties, inc. 24,83847 post properties, inc. 21,745

Total 829,292

sizing the Apartment reits



APARTMENT REIT SIzE AND RANK bY TWO MEASURES (as of January 1, 2007)

Apartments Company with Rank Total Cap rank Ownership among Capitalization among

Interest REITs ($ millions) REITsApartment investment and management company 211,800 1 13,416 4equity residential 165,716 2 24,272 1Archstone-smith 84,176 3 20,080 2united Dominion realty trust, inc. 70,339 4 7,837 5camden property trust 63,843 5 6,657 6AvalonBay communities, inc. 48,294 6 14,145 3mid-America Apartment communities, inc. 40,293 7 2,831 12Home properties, inc. 36,954 8 4,064 10colonial properties trust 33,724 9 5,017 8essex property trust, inc. 27,570 10 4,803 9Bre properties, inc. 24,838 11 5,214 7post properties, inc. 21,745 12 3,166 11

note: company total capitalization sums: (1) market value of shares outstanding, including operating partnership units; (2) the value of perpetual preferred stock; and (3) the book value of total debt outstanding. capitalization estimates for December 31, 2006, are provided by stifel, nicolaus & company, inc.

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The NMHC 50 ranks apartment owners by the number of apart-

ments in which they hold an owner-ship interest. For most of the com-panies in the listing, this is the sole measure of size that is both gener-ally available and relatively consis-tent (other than for differences in the degree of ownership interest).

Publicly traded REITs, however, can also be measured by total market capitalization. As with other publicly traded companies, size can be esti-mated by the stock market’s valuation of the company’s equity and the book value of its debt.

Since apartments represent the majority of assets for all of the REITs in the NMHC 50 (with one exception), their market capitalization is a useful and generally consistent measure of the market’s valuation of the com-panies’ apartment business. Colonial Properties Trust, as a diversified REIT, owns substantial real estate assets aside from apartments; hence, its total market capitalization overstates somewhat the market value of its

apartment portfolio. Therefore, it is no surprise that it ranks (slightly) higher when measured by market capitaliza-tion than by units owned.

The accompanying table ranks the publicly traded REITs in the NMHC 50 ownership list by the number of units but also shows their total market capitalization and how they would rank by that standard. There are some clear differences in the rankings. AIMCO, which holds the highest position among REITs in the NMHC 50, has an ownership inter-est in 28 percent more apartments than Equity Residential, but Equity Residential is over 80 percent larger when measured by total market cap-italization. By the latter measure, AIMCO is the fourth largest apart-ment REIT. The two other REITs that have a market value rank that is substantially higher than their NMHC 50 rank are AvalonBay (No. 6 measured by units, but No. 3 measured by “market cap”) and BRE Properties (No. 11 in units, but No. 7 in “market cap”).

The differences between the two rankings have several expla-nations. The most important dif-

ference has to do with partial owner-ship of apartments. In addition to being the sole owner of thousands of apartments, some companies have partial ownership interest in others, typically through involvement in a partnership, as either the general partner or a limited partner.

While this ownership interest may be as small as one percent, the apart-ments enter the count as if they were owned exclusively by the REIT. The valuation measure, by contrast, effec-tively adjusts for the extent of owner-ship. For example, AIMCO has full ownership of only about half of its apartments.

Other reasons for differences between the rankings include: (1) dif-ferences in apartment value among companies based on apartment qual-ity or geography; (2) differences in the investor assessments of the qual-ity and stability of current income as well as the growth prospects for the company; and (3) differences in portfolio holdings of assets other than apartments, including both “hard” assets and the valuation of contracts for “third-party management” of apartments owned by others.


INDUSTRY CONCENTRATIONThere are several useful measures of the degree of concentration

in the ownership of apartments. To begin with, the 10 largest

firms own more than 1.2 million apartments; the top 25 firms

own just under 2.0 million; and the entire top 50 own 2.7 mil-

lion. As a share of the nation’s apartment stock, this represents

7.0 percent for the top 10 and 15.2 percent for all NMHC 50

owner firms combined.

There are two seemingly contrary trends worth noting. First,

the minimum ownership size to make the top 50 list has edged

down slightly in recent years. It is possible that this is mainly the

result of the evolving definition of ownership. (Investment fund

managers and tax credit syndicators with neither substantial

equity stake nor effective responsibility are no longer considered

owners.) Even without this change, however, it is likely that the

threshold size would be little changed.

By contrast, the size of the median firm among the NMHC

50 owners rose to a highest-ever level of 40,312. (And note that

had the ownership definition not changed, that figure would be

higher still.) This is evidence of the increasing size of the firms

in the lower and middle part of the top 50 rankings. This is

confirmed by the holdings of the “second 25”—the firms in the

bottom half of the ownership list. At more than 700,000, this is

also an all-time record. In other words, the apartment sector is

witnessing the growth in a larger number of medium-to-large

firms rather than the emergence of a few giants.


NMHC 50 OWNERSNumber of Apartments Ownedtop 10 1,235,423second 10 517,026top 25 1,961,824second 25 705,227top 50 2,667,051

Portfolio Size Measuresmean 53,341median 40,312no. 1 firm 211,800no. 50 firm 19,759

Share of National Apartment Stock (%) top 10 7.0%top 25 11.2% top 50 15.2%

APARTMENT MANAgERSThe list of top managers in the apartment industry includes

not only some of the nation’s top owners—who self-man-

age the properties they own and hence appear on both the

ownership and management lists—but also large firms that

specialize in property management, and therefore do not

show up on the list of top owners.

THE lEADERSFollowing a one-year stint as the second-largest apartment

management firm, AIMCO returns to the top slot again this

year. Unlike its ownership portfolio, which decreased by near-

ly 22,000 units, its management portfolio grew substantially,

putting it back over the 200,000 mark. Equity Residential,

which shed even more apartments from its management

portfolio than from its ownership portfolio, comes in at No. 2.

Between them, these two firms have shared the top two slots for

each of the last eight years. American Management Services and

Lincoln Property, while continuing to grow, retain their rank-

ings from last year, while relative newcomer Riverstone vaults

into fifth place (see sidebar).

Archstone-Smith added another 3,000 units under manage-

ment, keeping it solidly in the top 10 again. Greystar Real Estate

Partners added almost 8,000 apartments and retains its No. 7

spot. United Dominion, Wachovia, and WinnCompanies round

out the top 10.

THE NEWCOMERSFor the second straight year, there are seven new firms in the

NMHC 50 management list this year. The largest newcomer is

CnC Investments; with 39,016 units, it debuts in the No. 28 slot.

JPI returns to the management list at No. 29 after a three-year

absence (see sidebar). Another developer, Forest City, returns

after a two-year hiatus in the No. 37 position. Steven D. Bell &

Co. makes its first appearance among the NMHC 50 at No. 38,

while Milestone Management, Realty Management, and Lindsey

Management debut at No. 41, No. 45, and No. 49, respectively.

RISINg STARS OF MANAgEMENTFour of the top five management firms were among the group

with the biggest portfolio increases. The biggest by far was

Riverstone, which added 36,250 apartments. BlackRock Realty’s

addition of 23,255 units under management was large enough to

have put them in first place in most years. In addition to AIMCO,

Lincoln Property, and American Management Services—the

other top five firms with big portfolio increases—The Michaels

Development Company showed a significant increase in the

TOP 10 APARTMENT MANAgEMENT FIRMSRank Company No. of

Apartments Managed

1 Apartment investment and management company 209,4122 equity residential 165,7163 American management services (dba pinnacle) 144,3274 lincoln property company 126,1045 cAs, riverstone/Banyan 91,2506 Archstone-smith 84,1767 Greystar real estate partners, llc 80,9118 united Dominion realty trust, inc. 70,3399 Wachovia 69,55810 Winncompanies 65,087



number of apartments under management.

BlackRock moved farthest up the ladder, jumping 26 slots

to No. 16. The Michaels Development Company moved up 7

notches to the No. 22 slot. Riverstone’s big portfolio addition

enabled it to gain 6 slots—it is always harder to move up in

rankings when a firm is already fairly high up—placing it at No.

5. The Lynd Company, which added almost 5,000 units, moved

up 5 slots to No. 35.

APARTMENT MANAgEMENT gROWTH AND CONCENTRATIONAfter declining for three consecutive years, the

number of apartments managed by the NMHC 50

shot up to a record 2,581,200 in 2007. The gains

were spread across the entire spectrum—the top

10, the second 10, the top 25, and the second 25 all

registered increases from last year. For the second

25—the bottom half of the NMHC 50 manage-

ment list—the 13-percent pickup in apartments

managed produced a third straight record year.

As with ownership, this signals increasing size

among the small-to-medium size firms among the

top 50. This can also be seen in the size of both the

median and the threshold for entry to the NMHC

50 management list. The median rose to 40,010,

almost 20 percent higher than the previous record

set back in 2000. The minimum size is also a record at 25,277.

The share of all apartments managed by the top 50 firms rose

sharply to 14.7 percent from 13.6 percent last year. Another mea-

sure of concentration—the share of NMHC 50 management

portfolios accounted for by the 10 largest managers—declined

for the fourth straight year to 42.9 percent, down from a peak of

49.1 percent in 2000 and the lowest figure since 1994.

APARTMENT MANAgERSlargest Portfolio growth ApartmentscAs, riverstone/Banyan 36,250Blackrock realty 23,255Apartment investment and management company 17,461lincoln property company 13,176the michaels Development company 9,096American management services (dba pinnacle) 8,802

Moving Up in Rank SlotsBlackrock realty +26the michaels Development company +7cAs, riverstone/Banyan +6the lynd company +5

NMHC 50 MANAgERSNumber of Apartments Managed 2007 2006 2005 2004 2003 2002top 10 1,106,880 1,051,603 1,087,273 1,111,312 1,194,738 1,172,515second 10 498,472 469,786 508,082 502,575 476,745 451,706top 25 1,810,315 1,703,865 1,773,679 1,793,148 1,847,756 1,800,142second 25 770,885 680,091 673,810 669,799 632,105 638,523top 50 2,581,200 2,383,956 2,447,489 2,462,947 2,479,861 2,438,665

Portfolio Size Measures 2007 2006 2005 2004 2003 2002mean 51,624 47,679 48,950 49,259 49,597 48,773median 40,010 33,150 33,559 32,164 31,592 31,320no. 1 firm 209,412 197,774 215,256 239,875 309,000 303,805no. 50 firm 25,277 22,500 23,457 23,469 22,353 21,105

Share of National Apartment Stock (%) 2007 2006 2005 2004 2003 2002top 10 6.3% 6.0% 6.4% 6.7% 7.4% 7.4%top 50 14.7% 13.6% 14.4% 14.9% 15.3% 15.3%

APARTMENT MANAgEMENT (by tier in thousands)

3,000

2,500

2,000

1,500

1,000

500 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07

top 10 top 25 top 50



SPECIAlISTSThere are 29 companies that can be found in both the NMHC

50 ownership and NMHC 50 management lists, up slightly

from last year’s figure of 27. Hence, each list contains 21 firms

that don’t appear on the other list. While many of these firms

are both owners and managers, their specialization in one area

means they do not reach the threshold needed to rank on both

lists.

The specialists include some of the largest firms on each list.

Three of the top five owners—and six of the top 10 owners—do

not appear in the management rankings. On the management

list, three of the top 10—and six of the top 20—do not appear

on the ownership list.

Two firms are among both the top 50 owners and top 50

managers, but have far more units under management than

the number of apartments they own. American Management

Services manages 93,813 more apartments than it owns, while

Lincoln Property has 79,166 more units under management

than in its ownership portfolio. In addition, Westdale Asset

Management, Wachovia, Milestone Management, and Picerne

Real Estate all rank considerably higher on the NMHC 50 man-

agement list than on the ownership list.

By contrast, there is only one firm on both lists whose own-

ership portfolio greatly exceeds the number of units managed:

Forest City, which owns 11,487 more apartments than it man-

ages. Two other firms—Lindsey Management and Essex—have

similar numbers of units owned and managed, but nonetheless

rank much higher on the ownership list.

largest Firms Appearing on Ownership list Only:mmA Financial, llcBoston capitalsunAmerica Affordable Housing partners, inc.enterprise community investment, inc.the richman Affordable Housing corporation

largest Firms Appearing on Management list Only:cAs, riverstone/BanyanGreystar real estate partners, llcWinncompaniescapstone real estate servicesthe conAm Group of companies

Alliance residential

16 NMHC 50 APRIL 2007

A sPecIAL suPPLement to nAtIonAL ReAL estAte InvestoR

Manhattan Transfer: BlackRock Realty’s Acquisition of Landmark new York city ApartmentsBy Mike Sheridan

Dale Gruen, Managing

Director of BlackRock Realty

It has been described as one of the biggest real estate transac-

tions in American history—a $5.4 billion deal involving 11,000

multifamily units spread out over 80 contiguous acres. In com-

parison, the United States government paid a then eye-popping

$15 million for the Louisiana Purchase—about $280 million in

today’s dollars—and received millions of acres in return.

But the joint venture of the two New York-based enti-

ties—BlackRock Realty, a premier provider of global invest-

ment management, risk management and advisory services,

and well-known development firm Tishman Speyer—instead

acquired two irreplaceable multifamily landmarks in New York

City—Peter Cooper Village and Stuyvesant Town. Bound by

First Avenue, FDR Drive and the East River, 23rd Street and

14th Street, Peter Cooper Village and Stuyvesant Town together

make up the largest apartment complex in Manhattan.

Tishman Speyer is known for its aggressive development

and acquisitions. BlackRock is a leading real estate invest-

ment manager with

some $20 billion

in real estate equity

assets under man-

agement on behalf of

public, corporate and

Taft-Hartley pension

plans, foundations,

endowments and

private investors.

What prompted

BlackRock’s interest

in the deal? There

were three reasons,

says BlackRock

Realty Managing

Director Dale

Gruen: “We con-

tinue to believe

that low apart-

ment cap rates

relative to long-

term averages

and relative to

other property types are a function of strong income growth

prospects for apartments, given healthy apartment market fun-

damentals; the recognition by the market that apartments are

a lower-risk property type; and, because apartments generally

have lower capital requirements than other property types.”

Peter Cooper Village and Stuyvesant Town were attractive

because New York City’s economy is robust, he continued. Job

growth and income growth are currently strong, driven by

strength in the city’s key financial services industry and the hos-

pitality, education, health and construction sectors. In addition,

unemployment is low and population growth in Manhattan

is significantly stronger than in the New York Metropolitan

Statistical Area.

“New York City’s housing market has yet to experience a

significant slowdown,” adds Gruen. “Prices are high and con-

tinue to rise, which is depressing affordability. In fact, housing

affordability—which takes into account home prices, incomes

and mortgage rates—recently dropped to a record low. Above-

average job growth, favorable demographics and a record-low

for-own housing affordability are driving strong demand for

rental units. Against the backdrop of limited supply of new

rental units, vacancy rates are extremely low and rent growth

is strong. These strong trends are expected to persist, and we

currently rank New York as one of the nation’s best apartment

markets for investors.”

Equally appealing was the fact that historically multifamily

units have produced the strongest returns across major prop-

erty types and the lowest volatility in returns. “Over the past 20

years, the property type has gone from a very small share of the

average institutional portfolio to a share that is similar in size

to retail and industrial,” says Gruen. “Investors are increasingly

recognizing that apartments have exhibited lower risk charac-

teristics, and this is now being priced more efficiently.”

Demand for multifamily units is strong, BlackRock points

out, driven by steady job growth, demographic trends, and

unaffordable housing. Yet, the supply of new multifamily units

has remained relatively in check—trends that have resulted in

falling vacancy rates and accelerating rent growth.

“Because apartments do not generally need large capital

requirements, the share of income that flows down to the

investor as a cash yield has historically been higher than for

commercial properties,” says Gruen. “This allows apartments

to have similar net cash yields at lower cap—net operating

income—rates than other property types.”

Will BlackRock continue more multifamily acquisitions?

Usually tight lipped, BlackRock isn’t saying. But many analysts

expect BlackRock to continue to surprise the U.S. real estate

industry—to say nothing of the multifamily sector—in the

months and years ahead.



Third-Party Powerhouse: Riverstone Residential Group’s Rapid GrowthBy Mike Sheridan

Terry Danner and Christy Freeland, Co-CEOs, CAS, Riverstone/Banyan

In a little over a year, Riverstone Residential Group (RRG) co-

chief executive officers Christy Freeland and Terry Danner

have transformed the former Trammell Crow Residential prop-

erty management division into an industry powerhouse in

third-party management.

Through hard work, determination, and a new equity part-

ner, Consolidated American Services (CAS), Freeland and

Danner have created the nation’s largest third-party indepen-

dently owned property management company. CAS, the parent

company of RRG and Banyan Realty, has $9 billion in assets

under management—91,000 multifamily units, 2,700 associ-

ates, and 17 offices.

“We went from one arm of a national development firm to

a large private company focused solely on property manage-

ment in six months,” says Danner. “This presented us with a

number of challenges such as solidifying operations, revamp-

ing infrastructure, and motivating associates during a time of

great change.”

Not only has RRG successfully met those challenges, says

Freeland, but Riverstone is currently looking for more acqui-

sitions. “We’d like to double or triple our current size,” she

continues. “Right now we are at 91,000 units. We’d love to be at

150,000 by the end of 2007. We currently have a letter of intent

out to add another 25,000 units. We want to grow smart, not just

fast. If you grow too rapidly, you can’t manage well. Our goal is

to not just sustain our reputation as a top quality management

firm, but, through our growth, provide the resources necessary

to elevate that reputation through improved efficiencies and

enhanced services to our clients.”

That’s a tall order for a company that has only been in

existence in its current form for about 14 months. Riverstone

Residential Group began with the January 2006 purchase of

Trammell Crow Residential Services (TCRS) by Freeland and

Danner, two of the unit’s senior officers. Upon closing the deal,

their basic task was to motivate employees, create a new infra-

structure, realize synergies, and grow the business.

The challenge the pair faced was how to make Riverstone a new,

fresh, re-energized company by taking the best practices from

the various Trammell Crow divisions, while at the same time

seeking ways to promote a more progressive culture. “At TCRS,

property management was subdivided into five separate groups

across the country, so there weren’t any economies of scale;

every region operated relatively autonomously,” says Freeland.

“At RRG, thanks to synergies and our larger size, we are real-

izing more economies of scale with maintenance supplies and

m a r k e t i n g

services and

the like. We

are more able

to control

expenses for

our owners.

At the same

time, they

have seen

substantial

ga ins in

e f f i c i e n -

cies in their

s u p p o r t

services (risk management, IT, accounting, etc.) by running

the company on a single platform.”

Communication was key in morphing the property manage-

ment arm of TCRS into Riverstone, the co-CEOs say. “We made

it a point to ‘over’ communicate,” says Freeland. “We had five

regions that had never worked together before, and we wanted

to get everyone to march to the beat of a single drummer.

Increased communication and interaction helped minimize

territorialism.”

At the same time, RRG’s unusual co-CEO approach was a

definite plus. “A lot of people asked, ‘How can you have a suc-

cessful company with two people trying to lead it?’ But, both

Terry and I have the same dream and seek the same end result,”

adds Freeland. “We approach things differently, yet have learned

to effectively combine those perspectives to enhance our deci-

sion-making and leadership.”

Looking ahead, the duo says they can gain even more synergy

and cost cutting through growth. “Most of the growth we expe-

rience from now on will be via acquisition, but operationally

it will be a merger,” says Danner. “We want the management

teams of the firms we buy to remain in place. We aren’t looking

to take a new organization apart. We want to buy good compa-

nies that can add value as a result of their quality operations, not

just because they help with critical mass.”

Adds Freeland: “Real estate management is a local game.

Our aim is to have a significant presence in every market in

which we choose to operate so that we can have the necessary

knowledge to benefit our clients. In real estate today, knowledge

is power, and with its vast operations, RRG certainly has that

knowledge.”



Merchant Builder Moves toward Management:JPI’s management Portfolio DoublesBy Mike Sheridan

Jim Butz, President and Managing

Director, JPI’s Eastern Division

the U.S. multifamily industry was abuzz last August when it

learned that a Texas firm more known for building apart-

ments than for managing them had increased its property

management portfolio by more than 200 percent in a single

transaction.

The property management business of JPI, a 17-year-old firm

based in Irving, Texas, jumped from 11,000 units to more than

37,000 when RREEF, the real estate investment management

arm of Deutsche Asset Management, said it was transferring the

day-to-day management of 59 of its U.S. multifamily residential

holdings to JPI, noting that JPI was a recognized market leader

in the development and management of multifamily assets.

“The synergy between our two organizations presents tre-

mendous opportunity for growth and success,” said Stephen M.

Steppe, head of San Francisco-based RREEF North America.

“The geographic spread of

our two residential real

estate portfolios is very

complementary, and our

operating philosophy,

emphasis on employee

development, and best-

in-industry technology

and information systems

are remarkably similar.”

While RREEF’s

actions may have

caught much of the

U.S. multifamily

industry off guard, it

wasn’t a surprise to

people who have fol-

lowed the progress of

JPI through the years.

The addition of the

RREEF properties

was a natural fit, says

Jim Butz, JPI East

President and Managing Partner. “JPI and RREEF share com-

mon operating philosophies, a common operating platform,

and are active in many of the same markets. The partnership

allows JPI to grow its multifamily management business and

ensure an evergreen company for all associates.”

One of the largest private multifamily real estate companies

in the country, JPI is known for developing high-end luxury

apartments and innovative student housing communities across

the country. Boasting a strong balance sheet and an unprec-

edented access to capital—with GE Capital Services as a major

investor—JPI specializes in upscale units aimed at aging, afflu-

ent baby boomers who no longer care for the responsibilities

that come with home ownership.

JPI is also an expanding company. “We are growing through

new development and through acquisition, which helps grow

our property management company,” says Butz.

While JPI has historically managed about 25 percent of its port-

folio for third-party owners, the RREEF transaction now means

JPI will manage 60 percent of its portfolio for external owners.

“JPI was seeking to grow our third-party relationships, and

RREEF approached us, as well as others in the market, while they

searched for a preferred management partner,” says Butz. “We

had been growing our property management company for some

time, but below the radar. Two years ago, we hired a director of

business development to help increase our third-party business.

The RREEF opportunity fell right in line with our new goal.”

While JPI will continue to build and sell properties, the firm

is planning to own and manage more of its new development

projects and acquisitions in the future. “JPI’s goal is to attract,

retain, and promote the best talent in the industry,” Butz contin-

ues. “The expanded community base allows JPI to ensure career

growth and opportunity for each of its associates. In addition,

the larger-scale portfolio allows JPI to invest more heavily into

technology, process, and people platforms to ensure that we

have the tools and talent to exceed our customers’ expecta-

tions—residents and owners.”

JoAnn Blaylock, Division President and Managing Partner

responsible for property operations at JPI, notes that in 2005

JPI’s founding partners purchased JPI’s Service Company inter-

est from GE, allowing JPI to expand its third-party construc-

tion, management, acquisition, and development services to

external customers.

JPI’s goal is to have 250 communities and 75,000 units under

management by the end of 2009, says Blaylock. “This will be

achieved via JPI’s internal acquisition and development busi-

ness, RREEF’s acquisition activity, as well as other strategic

third-party relationships,” she says.

Butz adds that JPI is looking at a combination of growth.

“We’re concentrating on growth and are increasing the number

of units we are developing,” he says. “But we are also ramping

our acquisitions business from doing $100–$200 million of new

acquisitions per year to $1 billion per year in acquisitions.”

But growth for growth’s sake is not what JPI seeks. “We want

to grow with the right acquisitions and the right development,”

Butz concludes. “We seek the right combination of growth—

and profitability.



Family Business:Family-Run Firms thrive in an Apartment sector Increasingly Dominated by Large, Public companiesBy Mike Sheridan

David Lynd, COO, The Lynd Company

Michael Lynd, Jr., Vice President of Investments, Lynd Residential Properties

After Jon Bell graduated from college, he worked for three

years at a leading East Coast commercial developer, obtained

his MBA and spent two more years at another real estate firm.

He then joined Steven D. Bell & Company, the company found-

ed by his father.

Brothers Michael and David Lynd patiently worked their way

up at the company their father started in the 1970s. “My brother

and I worked maintenance every summer from our 16th birth-

day until our sophomore years in college, when we began work-

ing in the offices leasing apartments,” recalls Michael Lynd.

“This experience gave us both a unique perspective that we

cherish to this day. We didn’t just sit around the Lynd Company

and wait for our promotions.”

Wil Cooper, Jr., joined WNC & Associates, his father’s firm,

at 27 after a successful career as a lobbyist in Washington, D.C.,

beginning as a marketing assistant. “I did not start out in a lead-

ership position, but worked my way into it,” Cooper says. “All of

our senior executives at the firm started, like me, in much more

junior positions and worked their way up. If you are good and

you work hard, you will be moved up.”

Bell, the Lynds and Cooper are excellent examples that fam-

ily-run firms continue to prosper in the American multifamily

sector. Those in the second generation have not only built on the

foundation laid out by their fathers, but through determination

and hard work come into their own. At a time

when larger and larger public companies are

becoming increasingly dominant in real estate,

this group—and others—are vivid reminders

that family firms can survive and even thrive in

today’s highly competitive multifamily sector.

When Michael and David Lynd joined the

business started by their father, Michael J. Lynd,

Sr., the company managed a mere 850 units.

Now it is responsible for 30,000 units—10,000

of which the company owns. “I think our success

has answered any concerns about nepotism,”

Michael Lynd, Jr., jokes.

David Lynd says the idea of nepotism has never

been an issue because of his brother’s and his own

work ethic. “Since we set the tone, all employees

and peers could see that hard work pays off regard-

less of your last name,” he continues. “They know

this because of the promotions to higher positions

that hard-working, loyal employees around them

receive. In addition, because our company was small when my

brother and I started in the business, we have been able to build

the company around us as we grew.”

Jon Bell notes his father insisted that he get outside experience

before joining the family business. “I would like to think that

along the way I was a good contributor to the companies for

whom I worked,” he continues. “I’d also like to think I brought

a fresh, unique perspective to Steven D. Bell & Company as a

result of my background.”

But does having the children of the founder in leadership

positions of the business adversely affect the company’s other

executives? Definitely not, says Michael Lynd. “Family employ-

ees are more likely to remain committed to the company and

have a lower likelihood of moving to other firms,” he says.

“The commitment level between siblings, like my brother and

I, is something that I believe to be very difficult to replicate.

Employees can have a much greater attachment to the leaders

because they are not just serving a term. It is, though, sometimes

difficult to manage your family relationships amid the pressure

to perform in a very competitive environment. However dif-

ficult this may be, I believe this pressure and the fear of letting

each other down plays an amazing role in the dynamic of a fam-

ily business.”

APRIL 2007 NMHC 50 23


David Lynd adds that as a family member, you are judged on

a higher standard than you would be as a normal employee at a

non-family business. “Emotions play into the interactions more

than traditional workplaces,” he continues. “It is a skill over time

to be able to see past the emotions and see the constructive criti-

cisms for what they are. Our group, comprised of three family

members, is brutally honest with one another. I do not think you

see it this rough in other environments.”

One of the primary advantages of a family business is having

a significantly streamlined decision-making process. “We don’t

have investment committees or a ‘black box’ approval process,”

says Bell. “We make quick decisions and take swift action. We

also have flexibility and can be creative when making offers

to purchase properties—perhaps accelerating timing, offering

non-refundable deposits or creative purchase structures.”

Cooper points out that WNC & Associates, Inc. deals with the

same issues all its competitors do—a changing marketplace, pric-

ing pressures, cost of capital, and talent recruitment and reten-

tion, among others—but being a family business definitely helps.

“We don’t have to file quarterly earnings with the hope that we

will be in favor with Wall Street this week,” says Cooper.

Jonathan Holtzman, chairman and chief executive officer

of Village Green Companies, a firm started by his grandfa-

ther, notes that by being private Village Green has the ability

to consider and benefit from a medium- to long-term view of

the market. “Public companies have to think about quarterly

performance and near to rapid returns,” says Holtzman. “More

so, the change in the number of public companies going private

illustrates that being private does not have any disadvantages

over being public. Private firms also benefit from increased cre-

ativity and a more entrepreneurial environment, allowing us to

have stronger leveraging power with our product.”

Family-run firms also learn to adapt. Steven D. Bell &

Company, for instance, has developed a profit-sharing plan for

senior executives, essentially accepting qualified executives as

partners. “This structure aligns individual interests with bottom

line corporate profitability,” says Jon Bell. “Rather than pushing

to grow their slice of the pie, it is our hope that these individuals

will focus on growing the whole pie.”

Nonetheless, the times are a-changing. Michael Lynd says that

the “professionalization” of the multifamily business, intense

capital requirements, and sheer competition will drive some

family-run firms from the industry. “Small family companies

typically do not have access to the cheapest cost of capital, and

that constrains growth opportunities and raises barriers to their

ability to compete,” he adds.

What family-run firms do have, though, is privacy, and that

may be attractive to some public real estate firms today. “The

zenith of big, public companies might well be behind us given

the reporting and accounting burdens of Sarbanes-Oxley,” says

Cooper. “We are already seeing more investors are opting out of

publicly owned structures. Plus, real estate is and will always be

a localized industry, which plays to the strength of family-run

operations.”

manly & mcGuire

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