Housing Numbers Could Lift Multi-Dwelling Focused MSPs

The housing market has been in the dumps for a while, but recently released government numbers offer some hope -- and a suggestion of opportunities down the road for managed services providers (MSPs). Here’s why.

The Commerce Department recently reported that housing starts for November reached a level not seen since April 2010. The biggest uptick came from multi-family housing starts, which saw an increase of 25.3 percent from October to November 2011, according Commerce, which also reported that the three-month average of multi-family starts is up as well.

The National Association of Home Builders (NAHB) noted that the multi-family sector’s November growth rate -- a 238,000-unit pace -- is the fastest since September 2008.

The growth in multi-family housing construction -- apartments and condos -- may well be the first piece of positive trending news MSPs in that sector have seen in quite some time. A number of MSPs offer managed Internet access services to property managers. Here are a few examples:

Blue Ridge Internetworks  provides a turnkey, managed service for owners and managers of apartment complexes. According to the Charlottesville, Va. company, the Internet access service includes remote administration and 24x7 remote performance monitoring.

Similarly, VISI Inc., a data center provider and MSP, offers Internet services to multiple-dwelling unit/multiple tenant unit customers. VISI, based in Eden Prairie, Minn., is a subsidiary of Telephone and Data Systems Inc., which was in the news in 2011 for acquiring OneNeck IT Services, an MSP specializing in ERP outsourcing.

Innervel Solutions Inc., an IT services firm and MSP in Alexandria, Va., also targets multiple-dwelling units. Innervel will “build a fiber network with in your community, manage the network devices and maintain end user connectivity,” according to the company.

It’s important to look at the housing data with caution, however. NAHB pointed out that the multi-family side of the residential market tends to be volatile. Production numbers may vary quite a bit month to month. That said, NAHB’s chief economist said he views the Commerce numbers as a sign of “gradual  strengthening” and anticipates “continued, slow improvement in housing starts and sales through 2012.”

That’s not the most glowing prognosis, but it’s probably the best outlook one can expect from the battered housing sector.

TAGS: Strategy
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