The Commercial Real Estate Alpha Site

We have somewhere between 6 and 10 of these massive projects already completed and renting or in ground up or lease up right now (Lakewood Ranch, FL)

Northmarq cites difficulty in obtaining capital for new projects as one reason.

By Richard Berger | January 11, 2024 at 07:58 AM <<— CLICK HERE for full story and others like it from GlobeSt.com

Single-family build-to-rent community completions through the first nine months of 2023 were 35 percent ahead of the previous year’s record-setting pace.

It’s a trend that Northmarq forecasts will continue into 2024, as developers work through a crowded construction pipeline.

Starts, though, tell a different story.

Capital has been more difficult to obtain for new developments, and the approximately 49,000 units that broke ground through nine months reflect an 11 percent year-over-year decline.

Given rising mortgage rates, some homebuilders are transitioning a share of their lots that were originally intended to be for-sale homes into for-rent communities, according to Northmarq.

“The lag between starts and deliveries is resulting in mixed construction trends for single-family rental homes in 2023,” the report said.

“While final year-end totals will not be available until early 2024, construction trends are on pace to diverge further.”

Hence, deliveries of single-family rentals were forecast to reach approximately 78,000 units in 2023, up 20 percent from the 2022 total, and starts will show a steep slowing in the second half, according to Northmarq, with the volume of construction starts for new single-family rental homes is expected to drop 27 percent from 2022.