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In keeping with our ORA themed insights during the first half of the year, we are diving into the NMHC Top 50 managers. Each May, J Turner Research ranks the Top 50 NHMC companies (based on unit counts) by their ORA (Online Reputation Assessment) Score to see who is doing the best job at delivering strong resident satisfaction. The ranking is not slated to come out until the 27th, so no spoilers until then, but that doesn’t mean we can’t nerd out on some data! Specifically, as I was helping finalize the ranking, I began to ponder if being one of the biggest operators in the country has negative effects on their ability to deliver strong resident satisfaction. Specifically, does it become harder to make residents happy and, if so, why?
In this blog, we are going to investigate an aggregation of the Top 50 NHMC Companies to see if there are key differences between them and smaller sized management companies.
Introduction
The Big Picture: NMHC Top 50 feedback tends to skew more negatively than average companies. Larger portfolio sizes can result in some loss of operational control, making it challenging to maintain high resident satisfaction across the board. However, some companies within this group perform incredibly well, giving themselves a huge competitive edge.
Why it Matters: Many owners enlist the help of these larger companies to third-party manage their assets. Bigger (or more brand recognizable) does not always mean better. Choosing the right one has massive financial implications, so it is best to use reputation data to understand who is likely to add value when onsite.
Sentiment Typically More Negative, but Adoption a Strength
Over the last 15 years, NMHC Top 50 companies’ review feedback has skewed more negatively than everyone else’s. This aligns with ORA Score trends, where the bigger PMC’s are prone to have a lower average and lower ceiling than companies managing less units. Specifically, review sentiment has been more negative in 14 of those 15 years, amassing a 45% positive : 55% negative ratio in review sentiment over that duration (in comparison to 58% positive : 42% negative across all companies).
This is obviously a pretty large difference. For an owner, this should be concerning as it signifies that there may be some operational performance lacking when hiring a larger third-party manager (especially if it is the wrong one).
But, as I hinted at, there is one exception: 2023, the single year NMHC Top 50 companies had higher satisfaction than all other companies. What is interesting about 2023, in particular, is that satisfaction was on a three-year decline industry wide. As we discussed in January, this turned around in 2024, the result of the industry finally figuring out how to better understand renter demands post-COVID and implement new technologies and processes that better met those demands. But the NMHC Top 50 companies solved this problem a year early, improving sentiment from 2022 to 2023 and reaching a higher sentiment than the rest of the industry.
I would theorize that this early improvement is an equation of what you get with a larger company: more capital resources + more people + larger infrastructure = faster adoption of new technologies and more widespread training. While there is not always going to be the need for massive adaptations like we saw coming out of a seismic event like a pandemic, I would argue that being able to stay on top of those changes does serve as a great case for why an owner might consider enlisting a larger third-party firm to manage their asset. However, I would implore them to ensure they are choosing the right one, as the data indicates that bigger does not always equal better.
An Emphasis on People
In terms of the content within the reviews themselves, the stark contrast between NHMC Top 50 companies and smaller managers is the prevalence of discussing service. Across the board, Customer Service and Communication are discussed more at properties belonging to these bigger companies. The Customer Service gap is massive: 77.7% of NHMC Top 50 reviews in 2024 discussed Customer Service, well clearing the 70.7% mark set industry wide. A similarly significant difference exists when diving into compliments within 4- and 5-star reviews.
A greater frequency does not necessarily indicate good or bad performance but rather points to a greater sensitivity. In other words, at NMHC Top 50 properties, more residents think of their relationship with the staff when describing their overall living experience in a review than on average.
My takeaway is this: companies managing on this scale have to make the experience about their people because of the variety of assets they are dealing with. Many of these companies have tons of properties spread across the country, varying in age, asset class, amenity offerings, and resident demographics. The one thing they can best control and sell as their brand is their people! While they cannot overhaul every community room to be a co-working space at all 300 properties they oversee, they can set up strong hiring and training programs to ensure that a resident living at a Bozzuto property in Washington DC feels a similar warm feeling to one living in Chicago or San Francisco.
As we saw in the sentiment analysis, however, this is not easy. Not every NMHC Top 50 company is going to perform as well as Hawthorne, Bozzuto, or Windsor and, generally speaking, we would expect them to score worse than average. Strong performance at this scale is noticeable. For example, 66.7% of all Bozzuto reviews over the last 12 months compliment the staff’s Customer Service in comparison to only 48.7% amongst their competitors.
I believe a big reason why is that a greater number of properties naturally results in less control. An unnamed contact at one these larger companies recently told me, “We have grown so much recently that it feels like we are always playing catchup or fighting to keep our head above water. There is only so much we can do when tasked with a companywide goal to keep costs low.”
At the end of the day, it is next to impossible to have perfect properties in perfect locations across the entire country, so only the best of the best can come up with the secret sauce – the type that is so well engrained that it is at the very fabric of who the management company is. So, kudos to those companies we will see at the top of the rankings later this month; there is a lot riding on your people and to be delivering a strong experience at that scale is truly impressive!
ABOUT THIS BLOG:
The insights in this blog came from utilizing J Turner Research’s text categorization tool, Einstein. Einstein uses Thought Analysis, a proprietary Ai software, to objectively show you your operational strengths and weaknesses based on anything anyone has ever said about you online in reviews. What is being said is incredibly valuable because it is essentially the "why" behind your scores. Reviews are unprompted descriptions of why a resident is satisfied (left a high star rating) or dissatisfied (left a low star rating). This means that what is being complimented and complained about can be seen by owners and operators as drivers of satisfaction/dissatisfaction.