Build-to-rent construction is increasing, and nowhere more than in the South, where ground has been broken for more than 61,200 units as of this September, according to RealPage. These numbers put that region ahead of the country’s three other regions combined.
Altogether, there are 104,160 BTR units being built. In the West 28,488 are projected to be finished by the end of 2025, and 12,571 units are anticipated for renting out in the Midwest by mid-2025. The Northeast has a far smaller number of 1,687 that should be finalized within the next 17 months.
Despite some talk that the construction in this segment might become less appealing, high interest rates of above 7%, limited inventory of existing single-family homes and other factors make it hard for potential buyers to purchase versus rent. Investors have also remained interested, as have developers. More than 60 developers have some 100,000 units in the pipeline. Some are well-known such as Scottsdale, Ariz.-based Cavan Cos. with 3,408 units, and a focus mostly in the South. Ohio-based Redwood Living builds in the Midwest and South and has 2,792 units underway. Also based in Scottsdale, Taylor Morrison has 2,578 units going up across the South. And rounding out the top five are American Homes 4 Rent out of Las Vegas and constructing 1,853 units in the Midwest, South and West, and Phoenix-based NexMetro Communities with 1,831 units under construction.
The size of homes varies by such factors as land availability and size of the amenities, making it hard to determine an average of unit size. But as examples, the report cited a few. Pradera Oaks in Houston sits on 250 acres in Rosharon, Texas, and will have 812 units developed by Wan Bridge Group. The floor plans will range from 1,400 square feet to 1,800 square feet and lease for about $2,395 a month, above current monthly rents in conventional apartments for the area. The project is expected to be finished in mid-2025. In Dallas, Taylor Morrison is building 51-unit Yardley Town Center in Anna, a Dallas suburb, with units from 717 square feet to 1,030 square feet; rents are still not determined but the conventional price in the area is $1,676 a month.