Orlando-based Avex Homes is the first local homebuilder to venture into the rapidly emerging single family build-for-rent industry.
Avex President Eric Marks told GrowthSpotter the company is looking at multiple locations in Central Florida for purpose-built rental communities, beginning with a site it has under contact near the U.S. 192 - Florida’s Turnpike interchange. The 24-acre site on Simmons Road is just north of the St. Cloud Commons shopping center and is under a single ownership.
Avex already won approval for a Comprehensive Plan Amendment to change the future land use to Low Density Residential, and it has an approved Preliminary Subdivision Plan for a residential neighborhood. The plan calls for 52 detached homes and 57 townhomes. Marks said they were getting ready to submit construction plans but wanted to explore doing a BFR community there instead.
“I do think there’s demand for the product in that area of Osceola County,” he said. “We just need to find a way to make it fit within Osceola’s Land Development Code.”
Purpose-built rental homes are among the fastest growing asset classes in the nation. In the last two months, two separate builders have proposed BFR communities in the Four Corners submarket of Polk County.
Marks said he’s discussed the proposal with Osceola’s Community Development Director David Tomek, who recommended he schedule a pre-application meeting with with the county’s Development Review Committee.
Marks wants to discuss a variety of issues, including rezoning and whether Low Density Residential subdivision standards apply for rental communities. For example, would the builder be required to offer three different product types?
Another key question is whether the communities would be considered single family or multifamily for the purpose of calculating impact fees. Osceola County has the highest impact fees in the state of Florida, which could make the product financially unfeasible.
Parking requirements raise other issues, since Osceola County requires 4.5 parking spaces per unit for single family homes. Those are typically accounted for with two spaces in the garage, two in the driveway and offsite guest parking. But in BFR hybrid communities, most homes don’t have attached garages, and many offer smaller floorplans with one or two bedrooms.
Marks said the BFR model has worked successfully in other parts of the country, particularly in Arizona where national production builders like Lennar and D.R. Horton are active in the space. The communities are sold to bulk investors who manage the lease-up and maintenance of the property.
“The company I think does it best is Christopher Todd Communities,” Marks said.
The Arizona developer launched its first BFR community three years ago and recently sold five communities, totaling over 900 homes, to Inland Real Estate. Christopher Todd Communities also entered an exclusive partnership with Taylor Morrison Homes in 2019.
Marks said for the asset to work on the Simmons Road site, he might have to rezone the site to Planned Development and increase the density. The current PSP is approved for 109 units, but the land use would allow up to 192 units. Since the project also would require a utility agreement from City of St. Cloud, the higher density might be too big an ask.
“I don’t know if it’s going to work at that location,” he said. “We are looking at it there, but we’re also looking at other locations.”
One example might be within the new Avalon Park Daytona. Avex is a subsidiary of Avalon Park Group, which is developing the 2,500-acre master planned community in Daytona Beach.
“Whether we do there or someone else, I do think there will be a Build-for-Rent component there,” Marks said.
Avex Homes was the first homebuilder to seek a subdivision permit in 2018 utilizing the county’s updated siting standards. Avex broke ground earlier this year on the project, Wiregrass, on Jack Brack Road.
Avex also was selected by the City of St. Cloud as master developer for 143-acre Stevens Plantation North property along Canoe Creek Road. Avex was one of seven developers who bid for the site earlier this year.