Why is Build-to-Rent the Hottest Industry Trend?

With build-to-rent (BTR) as one of the hottest trends affecting our industry, many individuals still have questions to be answered before they hop on the BTR train:

How is BTR different than building a regular for-sale community? What challenges have local BTR projects encountered and how were they overcome? Which markets are ideal for build-to-rent?

The ULI Orange County/Inland Empire chapter hosted a panel, Recession-Proof? Build-To-Rent: Why It’s The Hottest Trend in Real Estate, full of knowledgeable industry leaders to address these questions and more on September 29. This insightful event was moderated by Don Walker, Managing Principal and CFO at John Burns Real Estate Consulting. Panelists included WHA’s Founder and President, Bill Hezmalhalch, AIA, NCARB, Jeff Enes of IHP Capital Partners, Sheri Marvin of Jackson Tidus, and Leonard Miller of BrightSky Residential. Attendees of all disciplines gathered at the Newport Beach Civic Center, eager to be enlightened on the BTR market.

The event kicked off with a presentation hosted by John Burns providing an overview of the market. Moderator Don Walker highlighted trends regarding the housing and rental market, building costs, and offered an economic outlook and forecasts for single-family rent products. Following the presentation was a lively conversation amongst the panelists. With such a hot topic, it was thrilling to hear the featured experts share their diverse knowledge, forecasts, and engage with the audience.

The primary products included in this market include small lot single-family homes, two- and three-story towns and rowhomes, traditional detached products, and luxury single-family attached and detached products. With expensive markets like Orange County, the BTR market is foreseen to be more successful in the Inland Empire with a target audience of single parents, young couples and families. Although these products are materially smaller than what for-sale builders would traditionally build for this demographic, it is important to remember that the goal is still to design a home as if they were to own it. Bill Hezmalhalch shared his thoughts on this aspect with those in attendance:

When designing a product, it’s all about designing experiences that can enhance living opportunities for residents, regardless of whether it’s for sale or for rent. The build-to-rent target audience is moving out of apartment complexes and into single-family homes, so it’s key to offer them amenities such as two-car garages and a yard that allows them to feel at home.

The event offered the audience immense take-away value and thought-provoking content that is sure to stay with them as they explore the BTR market in their respective disciplines. In attendance among our WHA team was Denise Ashton, WHA Senior Principal of Planning/Community Design and Vice Chair of the newly formed ULI OC/IE Housing Local Product Council. As this panel was an inaugural program for the council, Denise shared her remarks on the success of the event:

In true ULI fashion, this dynamic panel of experts on build-to-rent from developer, builder, designer, and legal disciplines shared their knowledge and perspectives on what they are currently experiencing in this new asset class. It was stimulating, enlightening, and left us wanting more! I’m so proud that our ULI OC/IE Housing Local Product Council’s inaugural event was a terrific success!

Hearing the different perspectives on why BTR is such a hot industry trend is exactly why our WHA team looks forward to industry events like such where we can engage with and learn from individuals with varying experiences.