Another Rental Housing Company Ramps Up in the Southeast

Since the pandemic, rental housing has taken off in the Southeast. Now, another developer is scaling up production in the region.

With an influx of capital from Brazil’s largest homebuilder,  MRV, AHS Residential wants to go from developing a few hundred units a year to more than 1,000 by the end of this year. By 2024, it wants to hit 5,000 annually. Recently, the company broke ground on AHS Tributary, a 433-unit apartment community located in Douglasville, Georgia.

“MRV becoming a major shareholder in the company and making this huge investment allows us to grow more aggressively,” says Ernesto Lopes, president & CEO of AHS Residential.

AHS is moving into Georgia and Texas with designs on going national, targeting areas like Denver, the Carolinas and even Washington DC.  “We were focusing on the primary markets, where there’s really an affordability problem,” Lopes says.

Lopes likes primary markets because of what he sees as a diversity of economic drivers. He also thinks they are less susceptible to economic cycles or the cycles will be shorter.

“We forget that real estate is a cyclical business because we’ve been in this expansion for such a long time,” Lopes says. “And a lot of people have never experienced the downside. But it will come. Traditionally, the primary markets will run through these cycles faster than secondary and tertiary markets.”

Lopes also says it’s easier to attack affordability issues in primary markets. “If you go to a secondary and tertiary market where there’s not the same disparity, and there is more available product, even if you’re older, then we’re really not solving the problem the same way,” he says. “But the major metropolitan areas in the country are where the affordability crisis is the biggest, and that’s where we can make a difference.”

Lopes says his company is a building workforce product that is sorely needed in these markets.

“There is a gap in demand in the country for the type of product that AHS delivers, which is a good quality product for lower and middle-income Americans where they can afford the rent and live with dignity,” Lopes says. “I think there’s a huge need for that.”

As AHS ramps up, it is facing some growing pains. Its main issue is finding people. “It has been very challenging [finding people],” Lopes says. “In construction, we see a lot of shortages of skilled labor.”

Lopes says the partnership with MRV has allowed the firm to bring in help. “We use similar construction systems that they use,” he says. “So we’re able to bring on project managers and upper managers for the construction site. We have been able to bring some people from MRVs operation and, mixed with our own, that allowed us to create more teams to go out and expand. But it has been a challenge.”