Ivan Kaufman explains how as the small asset stock ages, the potential for value-add investment increases.

1. APARTMENT INVENTORY AGE: SMALL PROPERTIES
ARE OLDER, READY FOR UPGRADES
Small balance multifamily loans are typically between $1 million and $5 million. Chandan Economics
defines small-cap properties as 5 to 19 units, mid-cap properties as 20 to 50 units, and large-cap properties
as larger than 50 units. Both small-cap and mid-cap properties can fall into the small balance spectrum.
Source: American Community Survey; Chandan Economics
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Multifamily construction
is focused on large,
amenity-rich
properties. As the small
asset stock ages, the
potential for value-add
investment increases.
52% of units in both
small and large
properties were built
before 1980.
16% of the total units in
small properties were
constructed after 1999,
compared to 22% of
units in large properties
brought online during
that time.
Small Multifamily (5 to 49 units) Inventory
by Year Constructed
3.9%
11%
31.5%
11.6%
31.9%
10.1% 1939 or earlier
1940 to 1959
1960 to 1979
1980 to 1999
2000 to 2008
2009 to 2014
Large Multifamily (50+ units) Inventory
by Year Constructed
6.8%
10.6%
26.4%15.2%
30.2%
10.8% 1939 or earlier
1940 to 1959
1960 to 1979
1980 to 1999
2000 to 2008
2009 to 2014
Apartment Stock Age - Small vs. Large Assets
1,250,000
0
2,500,000
3,750,000
5,000,000
1939 or
earlier
1940 to
1959
1960 to
1979
1980 to
1999
2000 to
2008
2009 to
2014
Small Assets
(5-49 units)
Large Assets
(50+ units)