NEW YORK & PHOENIX, Ariz.--(BUSINESS WIRE)--As U.S. consumer demand and investment interest in rental housing increases dramatically, SVN | SFR Capital Management (“SVN | SFR”) today announced the launch of its commercial real estate (“CRE”) investment firm dedicated to the growing Build-for-Rent (“BFR”) rental home asset class. With its industry depth, investable inventory, and relationships with developers, homebuilders and institutional investors, SVN | SFR targets opportunistic investment portfolios to aggregate 35,000 newly-constructed homes located in dedicated Build-for-Rent communities.
Purpose-built rental home communities have the ability to deliver very strong risk-adjusted returns to investors for a meaningful period of time, given secular changes in housing across the country. Housing markets targeted for investment by the firm include the Southeast, Sunbelt, Central and Midwest states, including Atlanta, Charlotte, Phoenix, Denver, Nashville, Jacksonville and Tampa, to name a few.
“We’ve targeted top performing markets for investment in affordable rental housing and will complete our plan to provide consumers with access to better housing solutions,” said Jeff Cline, CEO of SVN | SFR Capital Management. Cline, who has more than 45 years of CRE experience and leadership, including construction, development, finance and asset management for large-scale residential and commercial projects added, “SVN | SFR’s differentiation as a national leader in the BFR sector is comprehensive – from our relationships with homebuilders to our investment in people, technology and operating/asset management processes.”
BFR continues to expand as CRE’s strongest investment growth sector, due to higher occupancy rates, less turnover and greater return on investment, compared to multifamily. Many large U.S. developers and homebuilders have diversified their strategic growth initiatives and ventured into building standalone rental communities. John Burns Real Estate Consulting highlights several reasons for BFR’s strong performance (and estimates that over 16 million single-family rental homes are in existence today across the country): (i) COVID-19 fueled the sector’s acceleration, with approximately the same number of rental homes as apartment communities in the U.S., (ii) stable SFR rents, (iii) potential tenants in this sector (aged 25-54) prefer renting over homeownership, (iv) BFR homes typically lease up quickly, maintain strong occupancy rates and achieve significant rent premiums, (v) single-family rents are forecasted to grow 17% through 2024 and 6% of new single-family rental growth is from BFR, with expectations of continued strong traction as an acquisition strategy this year.
The shift in desirability for BFR communities isn’t expected to slow anytime soon. Hunter Housing Economics states Build-for-Rent homes account for over 6% of new homes built in the U.S. annually, and this number is anticipated to double by 2024. Billions of dollars of equity capital has been invested into the sector in just the last year with a projected $40 billion more expected in the next 18 months.
SVN | SFR has engaged best-in-class third party professional service providers to ensure focused execution and operating profitability, critical factors to quickly scale. Firm affiliates – namely, SVN | SFRhub Advisors and SFRhub.com, as well as through its partnership with SVN International Corp. – have contributed to the firm’s prominent position in the BFR sector.
SVN | SFR Capital Management
SVN | SFR Capital Management, (“SVN | SFR”), based in New York City, NY, is a private, commercial real estate investment firm dedicated to investment in the Build-for-Rent (“BFR”) asset class across the United States. SVN International Corp. (“SVNIC”), a globally recognized, Boston-based, full-service CRE advisory firm, is an affiliated entity. SVN is advised by McIntyre Capital Partners, LLC, a registered broker-dealer with the U.S. Securities and Exchange Commission (SEC) and a member of FINRA and SIPC. SVN | SFR intends to aggregate approximately 35,000+ new construction BFR homes in the near-term through an initial allocation of $10 billion in equity and debt capital from institutional investors, to aggregate into a large-scale commercial real estate portfolio for eventual disposition. For more information call 602.466.1381 or email SFRCapitalManagement@svn.com.