The build-to-rent (BTR) sector has expanded significantly over the past five years and is expected to perform well long-term despite a recent slowdown in new project starts. The market currently encompasses about 350,000 units but is projected to increase by nearly 50%, according to CBRE's 2024 BTR residential market overview.

Most BTR communities consist of more than 50 homes or townhomes that operate similarly to multifamily assets but without vertical stacking. Properties are typically owned by investors and professionally managed. Sub-categories within the BTR sector are horizontal multifamily developments, single-family detached (SFD) and single-family attached (SFA).

The BTR sector is one solution addressing the nation's 3.1 million unit housing shortage by targeting millennials and empty nesters with flexible amenity-rich rental communities. Both groups are fuelling demand for large BTR developments, the CBRE report said.