Single-Family Rental Investors Make Bigger Bets on Build-to-Rent Homes

As competition for existing SFR assets intensifies, investors increasingly look at development.

Capital pouring into the growing single-family rental (SFR) housing market is bumping up against a tough competitor—the consumer. Heightened competition amid a tight supply of housing inventory in many markets is pushing investors to shift strategies to focus on new development.

“What you’re seeing now is the maturation and scale in the sector, where it is really being viewed as a distinct asset class within the real estate sphere, similar to multifamily or data centers,” says Gary Beasley, CEO and co-founder of Roofstock, a marketplace for single-family investment properties. Along with the maturing of the SFR sector, the market has seen more capital, including institutional money, that is targeting single-family rentals and looking for a way to enter the space.

For example, Tricon American Homes announced a new $750 million joint venture deal last summer with the Teacher Retirement System of Texas and Singapore’s GIC to acquire and manage a portfolio of rental homes together. Each has agreed to contribute $250 million to a fund that aims to acquire between 10,000 and 12,000 new SFR properties. “I think you will see other groups like that partnering with existing players to put money to work and build portfolios,” says Beasley.

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