3 min read Thinking Tools

How fragmented is multifamily?

A visual study of multifamily property management
How fragmented is multifamily?

Did you know that the US search engine market is dominated by three players (Google, Yahoo & Bing) with a 97.29% share?

Let's take another example - the US carbonated and soft beverage industry. Around 66% of the industry's market share is owned by two players (Coca-Cola and Pepsi.)[1][2]

But for multifamily, it's a different story. Despite a number of high-quality property management companies active in the market, the NMHC Top 50 manage only 9.4%  of the total rental market.

How big is the gap, though?

We created a visualization to understand how NMHC Top 50 measures up with the total rental market[3] of 44 million units. These include single-family, manufactured, multifamily with 2-19 units, and multifamily with 20 or more units.

Visualization Controls:

  • The graphic auto-plays, but you can pause and take a better look at each slide.
  • You can hover over each rectangle to get more information.

Let's breakdown the insights slide-by-slide:

Slide 1:

  • The Housing Vacancy Survey conducted by the US Census Bureau[4] puts the number of renter households at 44 million.

Slide 2:

  • The NMHC Top 50 manage only 9.4%[5] of the total rental units.

Slide 3:

  • The Top 10 NMHC managers manage only 4.3% of the total rental units.
  • However, this is 46.09% of all units managed by the NMHC Top 50.

Slide 4:

  • The top manager manages only 1.5% of total rental units. This is 16.79% of units managed by the NMHC Top 50.
  • The second largest manager manages only 0.47% of total rental units. This is 30% of the top manager’s total.

EndNote

Multifamily is a fragmented industry. Property managers — new and experienced — have plenty of room to build and grow.  Multifamily technology companies have many options: They can target the high-end Top 50 market, or target the mid-market segment just below the NMHC Top 50, or target the often ignored small property management companies

How do you look at multifamily fragmentation? Let us know in the comments.

Resources

  1. https://www.statista.com/statistics/225388/us-market-share-of-the-coca-cola-company-since-2004/
  2. https://www.statista.com/statistics/225419/us-market-share-of-the-pepsico-company-since-2004/
  3. America's Rental Housing 2022 by Joint Center for Housing Studies of Harvard University
  4. Housing Vacancies and Homeownership, census.gov
  5. NMHC Top 50 Managers

Published by:

Munish Gandhi

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