The nation’s most prominent apartment owner is now adding subdivisions to its robust portfolio, as the build-to-rent model grows in popularity.
On Oct. 6, the first phase of Apopka’s Avian Pointe community —which includes 56 single-family homes and 118 townhome units built by the nation’s largest homebuilder, D.R. Horton — sold to the country’s largest multifamily operator, Greystar.
The deal comes nearly a year after Greystar formed a joint partnership with Canada Pension Plan Investment Board to launch a newfound focus on the development and acquisition of purpose-built single-family rental communities across the United States.
Brett Moss, the managing director of Berkadia‘s Central and North Florida Investment Sales team, represented the seller, an entity that is controlled by D.R. Horton, in the transaction. He declined to give the exact sales amount but said it is greater than the $38 million shown in Orange County deed records for the initial closing.
“There’s been a lot of money raised around this whole build-to-rent strategy,” Moss said. “They (Greystar) partnered with this pension fund with the sole purpose to acquire single-family, build-to-rent products to continue operating them as rental products for the foreseeable future.”
Avian Pointe, once complete, will feature more than 750 residential units across a mix of single-family homes, townhomes, and apartments. Some of the townhomes within phase 1 are still under construction, Moss said.
Meanwhile, Taurus Investment Holdings is currently building out a 276-unit garden-style multifamily community adjacent to the Avian Pointe townhomes.
In January 2021, D.R. Horton paid $3.95 million for a 56-lot build-for-rent subdivision within Avian Pointe as part of the first phase. Later that summer, the homebuilder paid a little over $4 million for the first 118 townhome lots in the community.
Greystar declined to comment on the transaction, and D.R. Horton could not be reached.
Greystar currently manages over 782,900 units/beds globally, making it the largest operator of apartments in the U.S.
The company, headquartered in Charleston, South Carolina, announced in a December 2021 news release its push to add more of the BTR housing type to its expansive portfolio.
CPP Investments and Greystar allocated approximately $840 million in equity to the joint effort to acquire BTR communities. CPP Investments owns a 95% stake, while Greystar owns the remaining 5%, according to the news release.
“We’re pleased to make our first investment in the sought-after single-family rental sector alongside our existing partner, Greystar,” Peter Ballon, managing director and global head of real estate investments said in the news release. “Purpose-built single-family rental properties are becoming more desirable for a large and growing segment of renters in the U.S., particularly families or other renters looking for more space without sacrificing access to urban centres.”
Each BTR community acquired through the joint venture will have onsite leasing and maintenance as well as other communal amenities “in line with Greystar’s world-class product that focuses on maximizing resident experience,” the news release states.
“The partnership will target development areas that are near employment hubs, transit and retail centers across the sunbelt, mountain west and west coast regions of the United States,” the news release says.
Moss said the entire northwest region of Orange County along State Road 429 is “seeing unbelievable demand” for all housing types.
The build-to-rent concept has become particularly attractive across the country on the heels of a pandemic, he added.
A report by RentCafe said that 6,740 new built-to-rent homes were completed in 2021 nationwide. As of January of this year, there were more than double that number under construction: nearly 14,000.
“The American population is saying they need something more than a traditional apartment, however, may not have the resources for a down payment required to purchase a home or may not have the desire to own a home,” Moss said. “It’s a natural matriculation of households looking for more space than what most apartments offer.”
More build-to-rent homes were built in 2021 than any other year, and the activity this year is expected to shatter that record.
A report by RentCafe said that 6,740 new built-to-rent homes were completed in 2021 nationwide. As of January of this year, there were more than double that number under construction: nearly 14,000.
“Single-family rentals are not a new concept,” the report reads. “Although they proliferated in the aftermath of the 2008 housing crisis, this time it’s different. The pandemic created an unprecedented demand among renters for space and privacy, which houses can address much better than apartments.”
American Homes 4 Rent is planning what would be its ninth BTR community in the Greater Orlando area: a 100-lot subdivision called Palmetto Pointe just south of the Orlando Sanford Airport in Seminole County.
The preliminary subdivision plan was approved by the city’s planning and zoning commission at its Oct. 6 meeting.
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