Institutional Investment in Build-to-Rent Single Family Expands

Driven by pandemic-prompted consumer demand for larger rentals, more space

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Jul 20, 2021, 08:00 ET

SANTA BARBARA, Calif., July 20, 2021 /PRNewswire/ -- Institutional players are expanding their investment in the single family rental sector, reports Yardi® Matrix in a new special report.

Traditionally an afterthought for investors, interest and development of build-to-rent homes has burgeoned due to the pandemic, report Matrix analysts. Families are looking for more space, fewer shared walls and personal HVAC systems, all features offered in single family rentals.

Single-family rentals have long been a major subsection of the housing market, representing about one-third of the 46 million rental homes in the U.S. However, nearly 98% of single-family rentals are operated by private owners. Institutions did not enter the segment until after the 2008 recession and remain a small slice of the market, according to the report.

"Both the institutional single-family rental and build-to-suit segments gained momentum as a result of the pandemic, which created ideal conditions," say analysts. "Families wanted more space and the privacy of a detached home, but without the inherent limitations of a mortgage and homeownership."

Increasingly, institutions are growing their presence in the sector by building communities from the ground up. More than $10 billion has been allocated to the sector by institutions over the last few years. And around 12% of new single-family construction in 2021 is dedicated to future rentals, according to John Burns Real Estate Consulting.

Learn more about the expanded institutional presence in build-to-rent and single family rental homes.

Yardi Matrix offers the industry's most comprehensive market intelligence tool for investment professionals, equity investors, lenders and property managers who underwrite and manage investments in commercial real estate. Yardi Matrix covers multifamily, student housing, industrial, office and self storage property types. Email [email protected], call (480) 663-1149 or visit yardimatrix.com to learn more.

About Yardi
Yardi^® develops and supports industry-leading investment and property management software for all types and sizes of real estate companies. Established in 1984, Yardi is based in Santa Barbara, Calif., and serves clients worldwide. For more information on how Yardi is Energized for Tomorrow, visit yardi.com.

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