Private Equity Accounts for 10% of US Apartment Ownership

One in every ten people who live in a rented apartment in the United States is under the thumb of private equity, according to a report on the industry’s involvement in the sector.

Private equity firms own roughly 10 percent of the apartment units in the country, Bisnow reported. The high-level finding came from a Private Equity Stakeholder Project report, which tracked 121 private equity firms.

Those companies own approximately 8,200 apartment buildings that account for more than 2.2 million units, according to the report. The ten largest apartment owners among the private equity firms own 41 percent, or 900,000 of the aforementioned units. Apartments in the report include student, affordable and senior housing.

The author of the report said private equity’s involvement in the sector “has exacerbated housing affordability issues, displacing local communities through large rent hikes and aggressive evictions, and diminishing tenants’ quality of life.”

Those in the industry know it’s hardly so simple.

Notably, the report identifies private equity as “a type of investment where a firm acquires an asset, such as a company or real estate, through a combination of equity capital that it has raised from investors and debt,” adding that ownership of the acquired asset is private. The broad parameters rope in real estate firms, such as Related Companies.

Blackstone is the largest of the private equity firms tracked in the report, owning more than 230,000 units in the country. Greystar ranks second with 138,000 units, while Starwood Capital Group, Related and Cortland round out the top five.

More than half of the 2.2 million units are located in just five states: Texas, Florida, California, North Carolina and Georgia. The Lone Star State tops the list with 440,000 units owned by private equity firms; Dallas was also top amongst individual metro markets.

The report concludes with a series of recommendations. The author calls on private equity landlords to cap rent increases at 3 percent annually and to only carry out “just cause” evictions. The author also recommends public officials do more to protect tenants and limit corporate control of housing.

— Holden Walter-Warner