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Institutional Players Expand Investments In Built-To-Rent SFR

Katie Jensen
Jul 20, 2021

More families are looking for more space, fewer shared walls, and personal HVAC systems, all typically offered in single-family rentals.

KEY TAKEAWAYS
  • More than $10 billion has been allocated to building single-family homes.
  • 12% of new single-family construction in 2021 is dedicated to future rentals.

Institutional players have long neglected the single-family rental sector; however, burgeoning interest and development of build-to-rent homes are getting inventors’ attention. More families are looking for more space, fewer shared walls, and personal HVAC systems, all typically offered in single-family rentals. 

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

Single-family rentals represent about one-third of the 46 million rental homes in the U.S. However, 98% of single-family rentals are operated by private owners. Institutions did not start investing in single-family rental until after the 2008 recession and remain a small slice of the market. 

Institutions are increasingly growing their presence in the sector by building communities from scratch. More than $10 billion has been allocated to this sector by institutions over the past few years. According to John Burns Real Estate Consulting, around 12% of new single-family construction in 2021 is dedicated to future rentals.

To learn more about the expanded institutional presence in build-to-rent and single family rental homes, read the full Yardi Matrix Data Tracker Report. 

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