News ReleaseResearch 3/ 17/ 2021

NorthMarq issues special report on single-family, Build-to-Rent properties

This property type changes the multifamily rental and investment landscape

PHOENIX, AZ (March 17, 2021) — One of the fastest growing trends in multifamily housing is a new niche in single-family, build-to-rent (SF BTR) communities. NorthMarq has marketed, sold, and financed approximately 1,000 units of SF BTR communities, totaling more than $235 million to date, with a number of new active listings.

Cover image - Special Report: Single-Family Build-to-Rent Properties

These hybrid rental homes combine the privacy of single-family homes, the flexibility of renting, the convenience of professional property management, and the modern amenities associated with newer homes.  The pace of construction of single-family build-to-rent communities has been on the rise in recent years. In 2020, developers delivered approximately 50,000 SF BTR units, with the bulk of the development occurring in high-growth markets across the Southeast, Texas, and the Southwest.

Trevor Koskovich, president-NorthMarq’s Investment Sales business, at a recent IMN conference panel on this topic, suggested that the key difference for scattershot rental homes versus planned SF BTR communities is the ability to finance through traditional capital sources, making these communities more attractive to institutional investors. “The big difference is that these communities attract those renters-by-choice, which also provides occupancy stability, and therefore, investment stability.”

  • As single-family build to rent communities have been delivered and leased-up, properties have begun to sell. Per-unit pricing for SF BTR properties is generally consistent with newer, Class A, garden-style, suburban apartment properties, and cap rates have traded in a range of approximately 4 to 4.5 percent.
  • There is significant appetite for single-family build-to-rent assets in the capital markets. Financing for acquisitions is often treated similarly to traditional apartment properties, while several debt and equity sources are available for the development of new projects.

Read the full report here