As the single-family market falls from grace, Paul Hutchinson's phone at Lane Realty Construction in Atlanta has begun to ring, ring, and ring with calls from lumber dealers that want his business. If only they had the slightest idea of how to service his $280 million worth of multifamily work under construction.
"Their core business is single family," says Hutchinson, president of Lane Realty Construction, which is affiliated with Lane Co. of Atlanta, which has developed more than 100 multifamily properties. "They're structured for that. They're not structured to meet the needs of a 300-unit project."

He isn't the only one who thinks that way. Ask Gordon Benner what lumberyards could do to better serve the multifamily market, and you get a list longer than a 2x4 from Benner, who is president of construction for Flaherty & Collins Properties, an Indianapolis multifamily builder with nearly 1,400 starts in 2006.

That's because multifamily construction is not simply a taller version of its single-family counterpart. It is an industry on its own with properties and financials that borrow from both the residential and commercial arenas. Capturing and serving this type of construction requires an understanding of multifamily sites, players, properties, and the logistical challenges involved.

The good news: most of the items on multifamily builders' wish lists are service-related, which is where many yards seek to differentiate themselves from their competition. "Like any business, it's price and service," says Joe Wilber, senior vice president at Gables Residential, a national multifamily owner, developer/builder, and operator with a 12,000-apartment pipeline.

Hutchinson agrees. As price-sensitive as multifa-mily projects are, "your price doesn't mean anything to me if you can't provide the service," the Lane executive says.

Compared to the single-family market, multifamily construction does qualify as a niche, but it's still a large market. This year, multifamily firms are on pace to put a projected $48 billion worth of multifamily buildings in place, compared to $289 billion for single family, according to Census Bureau figures.

Of course, many of those properties are mid- and high-rise projects, especially in cities with strong job markets and demand for apartments. "The vast majority, 60% to 70%, of our pipeline is midrise," says Wilber of Gables, which operates in eight markets.

Luckily for lumberyards, that's not the case for everyone. "Most of our work at this point is five stories or less," says Randy Foster, president of Foster and Co. Based in Duluth, Ga., Foster's company has $100 million worth of multifamily under construction from the Carolinas to Florida and Louisiana, and he anticipates more starts next year. (Garden apartments are generally four stories or less.)

Foster's favored material? Wood. "The general consensus is that you use wood as high as you can go, and then you build denser and turn to concrete," he says. "Lumber is such a commodity that, generally at the price point we are building, the best choice is wood."