Residential Real Estate Brokerage and Management

The US residential real estate brokerage and management industry includes about 130,000 companies with combined annual revenue of about $125 billion. Major residential leasing and management companies include AIMCO, Equity Residential, and Trammell Crow Residential; major residential real estate brokers include Coldwell Banker and Keller Williams. The industry is fragmented: the 50 largest companies account for less than 30 percent of revenue.

COMPETITIVE LANDSCAPE

Demand is driven by population growth. The profitability of residential real estate brokerage and management companies depends on demand for properties and the volume of transactions they handle, both of which are usually higher during periods of strong economic growth and can be negatively impacted by a recession or too much new construction. Large companies have only modest economies of scale and benefit mainly from better name recognition than smaller rivals. Small companies compete effectively by developing expertise in a single market or region.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major services include leasing residential units to tenants (about 45 percent of industry revenue), real estate brokerage (40 percent), and property management (15 percent). Many companies provide multiple services; for example, companies that lease residential units to tenants might also manage the properties. Some residential real estate leasing companies operate as real estate investment trusts (REITs), which are covered in a separate industry profile.

Residential real estate leasing involves connecting property owners with tenants. Leasing companies might represent properties that they own themselves, properties that are owned ...