AHV Communities Has $500M in Committed Capital for SFR Development This Year

Single-family rental developer AHV Communities has a big year planned. The firm has secured $500 million in capital to develop 1,500 single-family rental, attached townhome and duplex units properties this year, a total of eight properties. The developer also plans to expand its geographic footprint and staff to respond to increasing demand for the product type.

“When we started this business eight years ago, no one was doing purpose-built single-family rental communities. We have always thought this was a great idea and that this product would be wildly desirable across all spectrums of demographics, regardless of work from home,” Mark Wolf, CEO of AHV Communities, tells GlobeSt.com. “What has changed is the massive amounts of capital that have flooded into the market. Eight years ago when we were pitching this business plan to every institution, many said no. Today, those same institutions are clamoring to get the very few deals that exist. That is really the impetus for our massive growth.”

AHV is based in the Austin/San Antonio area, and has generally stayed close to home. However, in the last year, it has rapidly expanded its geographic footprint, and place to continue to expand to new markets in 2021. “We have had massive growth outward from the Austin/San Antonio corridor. We recently expanded to Houston, Dallas, Denver, Seattle, and Southern California. We have new deals percolating in Nashville and Atlanta. That growth has happened in the last 12 months,” says Wolf.

In 2020, the firm completed four deals valued at a total of $300 million. This year, the firm will nearly double that activity, thanks in large part to new demand that has driven tremendous growth in the single-family rental market. “We have been steadily raising capital on a deal-by-deal basis,” says Wolf. “We have done a good job when capital was hesitant to be in the space and now capital is excited to be in the space. Now that we have proven the market through various projects, people are seeing that this is a real business and it has a long future in real estate as a sector. It has become easier to attract capital, and it is no surprise that we have grown.”

As for the pandemic, Wolf says that there are plenty of challenges that lie ahead for the greater real estate market, but he is bullish on the single-family rental sector. “I have a lot of concerns about where the market is heading,” he says. “For the sector, I am very excited. We have always seen this space as a fantastic alternative to homeownership and to class-A multifamily living. I think that when things normalize, this sector is going to be primed for a long-term place in the residential real estate investment community. Rents, appropriate land for development, struggling economy, tempered client base.”