Investment Opportunities Arise in the Build-to-Rent Sector

With low resident turnover and high revenue growth, the single-family build-to-rent (B2R) sector shows strong investment potential, according to recent CBRE data analyzed by Multi-Housing News. Rents in the B2R sector grew by 6.6% during Q4 2022 and have continued on an upward trend since then. Although still developing compared with other sectors of the market, B2R investment has gone up, with $24 billion in transactions between 2021 and 2022—a 250% increase over the previous five-year average. Through 2023 and beyond, B2R rents have outperformed multifamily. While vacancies in the B2R sector have increased in line with multifamily, they remain under 5%.

During the pandemic, migration away from the dense urban core of major cities benefitted BTR communities, as it did suburban multifamily communities. Larger and less costly housing units in suburban and secondary markets were the primary beneficiaries of the shift in demand. Due to these trends, BTR communities didn’t experience a Covid-era decline in rent. Rents for BTR reached an average of $2,100 during the fourth quarter of 2022.

Read more