The desire to live in single-family homes remains high, and the build-to-rent (BTR) sector is working to meet this need.
Across the country, the build-to-rent (BTR)/build-for-rent (BFR) segment of the rental housing industry is booming, and is expected double in size with roughly 14,000 homes available to renters starting this year, according to RentCafe. There were 6,740 BTR homes completed in 2021. There are upward of 90,000 single-family homes in about 720 BTR communities; this includes single-family homes, townhomes, duplexes and quadruplexes. Nearly two-thirds of single-family rentals are in the suburbs.
TruAmerica Multifamily recently launched a BTR division to bring the single-family atmosphere in suburban submarkets throughout the Southwest, Southeast and Texas. Within these rental communities, TruAmerica will focus on providing residents townhomes and single-family homes ranging from 1,200 to 2,200 square feet.
“The changing demographics of the U.S., the ongoing affordability-challenges and credit qualification standards of homebuying for Americans has led to a steep decline in homeownership rates, but the desire to live in a home remains high,” said Robert Hart, CEO and Founder of TruAmerica, in an announcement. “BFR is a natural extension of our workforce housing platform because it complements the same demographics that make up our Class B multifamily strategy. It provides yet another housing option for working-class Americans who can’t afford to own a home or would just prefer to rent.”
Meanwhile, investor/operator Haven Realty Capital has expanded its portfolio to more than $1.1 billion in BTR assets in less than 15 months. In October 2020, Haven Realty Capital acquired five communities under construction in Atlanta. Haven’s footprint is now 34 communities in nine states. “BTR solves many of the key challenges inherent with the scattered-site SFR business model, which is a reason behind the increased investor interest in the space,” said Sudha Reddy, Founder and Managing Principal of Haven Realty Capital, in a release.
Elsewhere, Texas-based builder and operator Wan Bridge has increased its portfolio by 1,000 units in partnership with Land Tejas in the Houston market. “The build-to-rent model of real estate has found a thriving home in Texas and we are eager to continue expanding our footprint across the Lone Star State, starting at Balmoral,” said Ting Qiao, CEO of Wan Bridge, in a release. “Land Tejas’ endorsement and trust in our build-to-rent model demonstrates that our product has a place in master-planned communities, so together we can offer residents the best of our company’s signature products.”
Nashville, Georgia and South Carolina are also seeing single-family rental growth with Kinloch Partners delivering homes for Baby Boomers. "Single-family rental homes continue to be a growing segment, with retiring Baby Boomers driving growth in the upper end of the market," said Bruce McNeilage, Co-Founder and CEO of Kinloch Partners, in a release. "We see SFR heading much more upscale as Baby Boomers retire, move to warmer climates and require high-end amenities. In addition, the emerging work-from-home movement stemming from the global pandemic is driving a need for larger homes with home offices."
Much of the growth in BTR is in the Sun Belt. The Phoenix market leads the way with more than 6,400 BTR homes. Columbus, Ohio, with its employment and population expansion in recent years, is second on RentCafe’s list with more than 4,700 homes. The Dallas metro is third with nearly 4,300 BTR homes. Houston, Riverside, Calif., and Las Vegas follow. Las Vegas is also home to the most single-family rental communities and the two largest BTR communities: 819 rentals each.
Read the October 2021 units magazine cover story for more on build-to-rent.
Mike Miller is Managing Editor at NAA.