St. Bourke, an asset management and property development company, weighs in on the state of the Build-to-Rent (BTR) industry, noting that it is still in its early stages and much remains to be learned about the emerging asset class. Despite some challenges, such as the availability of suitable land, increasing development costs, and the current debt market, St. Bourke remains optimistic about the future of BTR and its growth potential.
“The BTR industry has grown significantly in recent years, expanding from platted lot subdivisions and horizontal apartments to include cottages, townhomes, high-density detached, and conventional single-family subdivisions,” said Katie Fidler, Director – Research & Communications, St. Bourke. “While BTR now has a larger market share than traditional multifamily, we are still figuring out this asset class and how its role will evolve as the nation grapples with an extraordinary housing deficit and affordability challenges.”
The U.S. Census Bureau projects 1.5 million renter formations over the next five years, and half of these are expected to look to SFR/BTR product and communities as their preferred living accommodation.
“This supports BTR being a smart investment and development strategy despite the current challenges facing the larger housing market in light of high development and construction costs and high home prices and mortgage rates,” said Fidler. “BTR is only going to gain more steam; there is a huge runway for BTR growth.”
St. Bourke’s statement comes on the heels of Zonda’s Future of BTR Conference, where industry experts discussed the market’s current state and outlook for the future. St. Bourke shares key conference takeaways:
The BTR occupancy spike in recent years is slowing and returning to pre-Covid levels. Rent growth is slowing as occupancy drops, and more households are consolidating due to high housing costs.
High cap rates are eating into land value, and increasing property taxes across the…
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