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Small Buildings Still Dominate Apartment Renter Shares
1. Access the Industry’s Only Multifamily Small Balance
Research and Insights at arbor.com/blog.
BY ARBOR
Source: arbor.com/blog/small-multifamily-dominates-apartments
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.
All data is sourced from the American Community Survey (ACS), unless otherwise stated.
ACS statistics are sample-based estimates of the compositional profile of the total
population in the given year of data collection, and include a margin of error.
Population Growth by Asset Class
Year-Over-Year Growth Rate
Renter Growth Reflects Inventory Shifts
• The growth and shift in renter demand broadly mirrors the underlying supply-side
trends.
• The small property renter base declined at an annual rate of 1.6%, in contrast to
2.3% over the previous year.
• A large property inventory supply glut has helped fuel a renter population growth of
5.6% in this asset class.
Single-Family
Rentals
Source: Chandan Economics, American Community Survey, 2016
6%
4%
2%
0%
-2%
Overall U.S.
Population
Small Apartment
Buildings
(5-49 Units)
Large Apartment
Buildings
(50 Units or more)
2014-15 2015-16
Average Household Size by Asset Class: 2016
Number of Persons per Unit
• Single-family units, typically larger and preferred by families with children, house 3.1
persons on average.
• Large apartment buildings, which are more popular with single renters, house 1.8
persons per unit on average.
• Small apartment buildings, which cater to diverse household segments, come in at
2.2 persons per unit.
Single-Family
Rentals
Source: Chandan Economics, American Community Survey, 2016
3.3
3.0
2.8
2.5
2.3
2.0
1.8
Duplex-Quadruplex
Buildings
(2-4 Units)
Small Apartment
Buildings
(5-49 Units)
Large Apartment
Buildings
(50 Units or more)
Distribution of U.S. Renters Across Property Types
• Multifamily properties (5+ units) accounted for 37% of the nearly 105 million U.S.
renter population.
• Single-family rentals accounted for 45% of occupied unit inventory.
• Small apartment properties made up 28%, three times that of large buildings, but
less than single-family homes.
Distribution of the U.S. Renter Population: 2016
Source: Chandan Economics, American Community Survey, 2016
Percentage Share by Asset Class
Single-Family Rentals
Duplix-Quadruplex (2-4 Units)
Small Apartment Buildings (5-49 Units)
Large Apartment Buildings (50+ Units)
45.2%
18.1%27.6%
9.2%
While a majority of apartment renters continue to live in small properties, growth in this
property class is facing headwinds from large asset oversupply and rental incentives.
Small Buildings
Still Dominate
Apartment
Renter Shares
Arbor Realty Trust