TruAmerica Launches Build-For-Rent Development Arm
The firm enters high-growth Southwest, Southeast, Texas markets.
TruAmerica Multifamily has launched a Build-For-Rent (BFR) development division for townhome and single-family rental communities in suburban submarkets that align with its existing multifamily platform.
Veteran BFR executive Mitch Rotta has joined the firm as Senior Managing Director to lead the new initiative. Rotta has been involved in the burgeoning BFR space for the majority of his career, most recently with Tricor Homes, a build-for-rent construction operator and builder.
The initial roll-out of TruAmerica’s in-house BFR platform will be in high-growth Southwest, Southeast and Texas suburban markets, which represents approximately 60% of the firm’s $16.1 billion multifamily portfolio.
Build-to-Rent Sector Getting Crowded
The build-to-rent space continues to get more crowded.
Single-family rentals have been on the upswing and a heating market, drawing increasing attention from institutional investors. But big investors might instead focus on the build-to-rent market, suggests a presentation from real estate consulting firm RCLCO.
Last month, for example, Harrison Street and Core Spaces entered the segment. Core Spaces said it was looking to capitalize on the affordability challenges in the US housing market and changes in lifestyle preferences that are driving demand for single family rentals.
Its goal is to bring its “progressive design and hospitality-driven approach” in an effort to differentiate its build-to-rent communities in the crowded and growing single-family rental market.
BFR a ‘Natural Extension’ of Workforce Housing
The United States’ changing demographics, the ongoing affordability-challenges and credit qualification standards of homebuying for Americans has led to a steep decline in homeownership rates, but the desire to live in a home remains high,” TruAmerica’s CEO and founder Robert Hart said in prepared remarks.
“BFR is a natural extension of our workforce housing platform because it complements the same demographics that make up our Class B multifamily strategy,” Hart said. “It provides yet another housing option for working-class Americans who can’t afford to own a home or would just prefer to rent.”
TruAmerica will focus on communities with townhomes ranging in size from 1,200 to 1,500 square feet and single-family homes between 1,800 to 2,200 square feet with rents affordable to working class American families.