Steadfast Cos. has so far kept a somewhat low profile, but that may be about to change for the Irvine, Calif.–based firm. Through steady growth and strategic positioning, the newcomer to the NMHC 50 Owners list is making a name for itself. 

In a year characterized as a seller’s market, when many large companies shrank their portfolios, Steadfast experienced approximately 15% growth in 2014 by adding 3,685 units, and jumped onto the NMHC 50 at No. 40. The past two years have been busy for Steadfast, with about $2 billion worth of activity and the introduction of Steadfast Apartment REIT.

It’s not just the company’s growth that’s noteworthy, however; it’s the understated, tried-and-true strategy it took to get there.


“I like to think our strategy is very simple, although it’s been very successful,” says Steadfast Apartment REIT President Ella Shaw Neyland. “Our strategy is to buy moderate-income apartments, which means a rent that most of America can afford, in high–job-growth markets.”

While Steadfast operates in metro areas that are projected to have above-average job and population growth, the firm has largely stayed out of red-hot coastal cities like San Francisco and New York in favor of secondary markets in the Midwest and South, such as Atlanta; Austin, Texas; Indianapolis; and Louisville, Ky. 

Though some have questioned why the company has shied away from some of the most popular urban locales, Neyland says the approach is key to maintaining growth.

“One of the challenges I think you’re seeing in the coastal cities, which we’re not in, and with some of these very expensive luxury apartments, is that the percentage of [income] going toward housing is creeping up to levels that are just unsustainable.”

Hidden Charms

That attention to long-term rent sustainability has been a driving factor in both the firm’s market and asset selections. Along with focusing on secondary markets, Steadfast acquires largely Class B properties, which make up approximately 59% of the company’s market-rate units. When acquiring a new property, the company emphasizes value-add rehab opportunities. 

“We look for an apartment community that just hasn’t had money invested in it recently that gives us the ability to come in and run it a little better—upgrade the interior homes, deliver value to the residents, and also be able to have some rent increases but still be competitive in the market,” Neyland says.


Since these secondary markets haven’t been the main target for many large, institutional investors, Steadfast has been able to build concentrations and gain operating efficiencies, a key consideration when deciding which new markets to enter. 

As the coastal cities remain highly competitive and cost-prohibitive, investors are increasingly turning toward these metros, which could increase the challenge for Steadfast to maintain a leading presence going forward. 

But Neyland says the concentrations Steadfast has already established will help the company stay ahead of the curve. “I think we had the advantage of being early in these markets, and I think we know the markets we’re in better than any other apartment company currently in them.”

steadfast companies property AR community
Victor Sanchez A recent addition to Steadfast's portfolio, The Oasis in Colorado Springs has over 250 units.

Middle Market Momentum

Also positioning Steadfast well for the future is strong demand for affordable apartment homes, which Neyland doesn’t see abating any time soon.

“We think the demand for moderate-income apartments will be even stronger going forward than it has been,” she says.

That demand will be fueled by the continuing influx of millennials graduating from college, entering the job market, and forming renter households, Neyland says. “Think about the paychecks they’re getting when they get out of school—they can’t afford a luxury apartment.” 

In addition to young college graduates who need an apartment that fits an entry-level budget, Steadfast aims to meet the needs of GenYers who are renting longer, often delaying marriage and homeownership, but who want to live without roommates.

“We’re pricing our apartments to where we’re really appealing to a wide range of people who want to pick apartment living for a long-term lifestyle choice,” Neyland explains.

Demand isn’t coming from just the younger generation—an increasing number of baby boomers, potentially on fixed incomes, are moving to apartments to downsize. In addition, a majority of job creation is happening at the moderate-income or part-time level, Neyland notes. “The economy really is creating a nation of moderate-income renters.”

steadfast companies property summer valley pool community
The Club at Summer Valley in Austin, Texas, mixes garden-style apartment buildings and townhomes.

Value Engineering

Staying at an affordable price point is crucial to Steadfast’s business model, but equally important is providing quality homes at a good value for residents, Neyland says. 

To meet that goal, Steadfast zeroes-in on the deliverables that will have the greatest impact—and, according to Neyland, the basic priorities haven’t changed: The foremost concerns for renters, she says, are location and price point, not bells and whistles. To that end, Steadfast looks for assets with access to local transportation, businesses, and retail, but that are still in budget-friendly markets.

The next priorities are providing excellent service and maintenance; performing interior unit upgrades; and, increasingly, offering pet-friendly features, ­which have skyrocketed in popularity, says Neyland. 


“Things such as clubhouses are important, but I think they’re much lower on the scale of what people’s decision-making tree is. … We’ve focused on things that we think are more important: location, price, service, and the ability to deliver a nicer interior home.”

So far, that focus is working for Steadfast. And with a clear-cut business plan and a penchant for finding value, the company is poised to continue its pattern of growth as steadily as its name implies.