Dive Brief:

• Greystar reclaimed the No. 1 apartment developer spot with 9,151 starts in 2023, according to the National Multifamily Housing Council’s Top 25 list. The Charleston, South Carolina-based company moved up from No. 2 in 2023 despite breaking ground on 2,500 fewer apartments as new construction became more difficult to underwrite.
• Boca Raton, Florida-based Mill Creek Residential jumped one spot from No. 3 to No. 2, though it started almost 3,000 fewer units. Dallas-based Trammell Crow Residential jumped from No. 5 to No. 3, though it broke ground on more than 3,000 fewer apartments. Scottsdale, Arizona-based developer Alliance Residential slipped to No. 6 after taking the top spot last year. 
• Jacksonville, Florida-based construction company Summit Contracting Group claimed the top spot on the NMHC’s multifamily builders list for the second straight year with 12,467 starts, more than 1,500 fewer than the year before. Mill Creek, with 8,022 starts, and Greystar, with 7,645 starts, took the No. 2 and No. 3 spots, respectively, though both posted year-over-year declines.

Dive Insight:

The slowdown in starts experienced by the largest companies on the NMHC’s top developers’ and builders’ lists wasn’t universal. 

On the contractors’ list, two companies saw their starts increase by more than 2,000 apartments — Plymouth, Minnesota-based Roers Companies (No. 21) and DeLand, Florida-based BCC Construction (No. 16). Greenwood, Indiana-based The Garrett Companies (No. 12) and Winter Park, Florida-based Hillpointe (No. 6) saw groundbreakings jump by more than 1,000 units YOY.

On the developers’ list, Chicago-based Core Spaces (No. 8); DeLand, Florida-based Prospect Real Estate Development Group (No. 20) and Camden, New Jersey-based The Michaels Organization (No. 7) broke ground on at least 2,000 more than the year before. 

Developers Hillpointe (No. 5) and Los Angeles-based SoLa Impact (No. 16) started more than 1,000 more units in 2023 than they had in 2022.

Norfolk, Virginia-based Harbor Group International saw the biggest decline in units at almost 5,000. Newark, New Jersey-based PGIM Real Estate’s portfolio declined by almost 4,000 residences and Des Moines, Iowa-based BH Equities shed slightly more than 3,000 apartments.

Michaels and SoLa Impact focus on affordable housing, showing that those deals could still be completed. Hillpointe specializes in providing multifamily rental housing that is affordable to people who earn between 60% and 120% of the area median income, or about $50,000 to $85,000 annually, according to Steven Campisi, co-founder and managing partner.

“Broadly, our investment thesis is centered on our ability to execute at a significantly lower cost basis than our competitors, which is increasingly important in the current environment of rising rates and construction costs,” Campisi told Multifamily Dive.

Starts drop

Despite the increases enjoyed by companies like Hillpointe, most major apartment developers and contractors still saw significant YOY drops in new starts. Overall, starts for buildings with five or more units fell from 531,000 to 459,000, according to the Census Bureau.

However, that doesn’t mean that contractors like Summit weren’t busy during the year. The company completed 7,771 units in 2023, making it one of its best revenue years ever. “If we sign jobs in 2021, we don't see all the profit from that until we get them built,” Marc Padgett, president at Summit, told Multifamily Dive.

But as financing costs rose, the capital markets tightened and rent growth plateaued, it became harder for developers to underwrite new projects in 2023.

Norfolk, Virginia-based Harbor Group International saw the biggest decline in units at almost 5,000. Newark, New Jersey-based PGIM Real Estate’s portfolio declined by almost 4,000 residences and Des Moines, Iowa-based BH Equities shed slightly more than 3,000 apartments.

“In 2023, we signed fewer jobs than in 2021 and 2022 because interest rates were up and insurance rates were up,” Padgett said. “Everything slowed down due to that. So we'll see a ripple effect from that falling into 2024 and 2025.”

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