2022 NMHC Top 50 Owners

The Michaels Organization has made several moves over the past year to grow and strengthen its business.

The vertically integrated company, based in Camden, New Jersey, primarily focuses on the development, construction, management, and investment of affordable housing, but it also works in military housing as well as the student and market-rate multifamily spaces. It ranks No. 19 on this year’s NMHC top owners list, with a portfolio of 54,969 units, as well as No. 26 on the managers list. Drilling down, the company is the nation’s top affordable housing owner on sister publication Affordable Housing Finance’s annual AHF 50 list, with just over 47,000 units.

One of the major moves it made in 2021 to become more efficient was to streamline its management operations. Michaels combined its three different operating companies focused on managing affordable, military, and student and market-rate housing under one property management banner.

“We’re in 37 different states and 440 communities. Oftentimes, we will have a market-rate deal a few blocks from a student deal and a few blocks from an affordable development,” says Milton Pratt Jr., executive vice president. “We weren’t taking advantage of the synergies.”

Another significant highlight for the company in 2021 was the largest single acquisition in its history. It added more than 15,000 units to its portfolio by acquiring eight military housing communities owned by Clark Realty that it had already managed. The communities, located on both coasts, serve Army, Navy, and Air Force families. As a developer, manager, and owner of privatized military housing since 2004, this brings the Michaels’ military portfolio to just over 18,000 homes.

“This is the big news for us last year in terms of growing our business,” says Pratt.

In addition, Michaels plans to continue its expansion efforts across property types through its newly created acquisitions platform this year.

Its first transaction earlier this year included the acquisition of a 12-property residential portfolio in Indiana. With 831 affordable and workforce housing units and commercial spaces, the deal upped the company’s presence in the Midwest to more than 5,300 apartments.

Michaels also is planning for growth opportunities with new development. On the market-rate side, the firm is doing deals and planning to grow in the hot Sun Belt markets of Charlotte, North Carolina; Huntsville, Alabama; and Orlando, Florida. On the affordable housing side, it is planning for additional growth in Hawaii as well as key markets in Arizona and Texas. It also is ready to start predevelopment on a community south of San Juan, Puerto Rico.

“We are going to grow, but we are going to have responsible growth,” says Pratt. “That means we’re not going to overextend ourselves into markets or product types where don’t have the experience or can’t grow the talent.”

With that growth, Pratt reminds that people remain the company’s priority.

“We are living and breathing our core values of lifting lives. Homes are where it starts for families,” he says. “Taking care of our residents comes first, and real estate comes second.”