Go ahead and picture an apartment building. If you are like most people, then you are likely envisioning something large, tall and in a city. Well — as recent Chandan Economics research published on ALEX Chatter shows — most multifamily renters (57%) actually live in buildings with between 5 and 19 units. The research also examines the growth in renter cohorts by asset size:
“More telling than the current large and small property shares of the market, the rate of growth in the small property population has increased, from an annualized 1.6 percent between 2006 and 2010, to 2.0 percent between 2010 and 2014. As shown below, the growth rate of residents in large properties has actually slowed.”
Small buildings are often overlooked when thinking about apartments because Millennials — the largest cohort of renters — typically favor large, amenity-rich urban properties. For the rest of American renters (including families looking for units with larger bedroom counts) smaller apartment properties present a better, and oftentimes more affordable, opportunity. Be sure to check out the full ALEX Chatter blog post for charts.