The energy at the IMN BFR conference in Nashville set a promising tone for 2024. IMN events are always a great way to litmus test evolving dynamics and opportunities in the SFR market. In addition to fostering more strategic collaborations and staying agile, here are some of my takeaways from the week in Nashville.
Embracing Optimism in the Market:
This year’s IMN conference was abuzz with a palpable sense of optimism, especially among institutional buyers and operators eyeing single-site Build-for-rent projects. The enthusiasm of buyers indicates a renewed confidence and readiness to dive into promising opportunities.
Solidifying the SFR Asset Class:
Investor feedback echoed a resounding sentiment of confidence in the SFR asset class. Despite market fluctuations, the stability showcased by steady home prices, even in the face of rising interest rates, has bolstered investor trust and interest in SFR properties and deals.
Strategic Pivot:
After a cautious pause, Builders are hitting the accelerator on land acquisition and lot development, anticipating future inventory demands from retail home buyers and build-for-rent investors. When looking at Build For Rent Investors, there’s a notable shift towards embracing earlier-stage deals like land development and lot purchases with investors looking to take on development and building risk instead of coming in strictly at home completion. This is generally seen as a necessity to hit investor return numbers. The shift marks a strategic realignment within the industry.
Seeking Quality Collaborations:
Investors are actively seeking robust partnerships with builders that offer fee-build services and are willing to share project risks. While completed community deals remain attractive, navigating the retail market’s strength requires strategic collaborations and innovative approaches.
Continued Buzz Around New Construction:
The buzz around new construction properties remains strong, with cap rates hovering in the high fives. Investors are eyeing these opportunities with a focus on strategic pricing and collaborative ventures with builders recognizing the potential for mutual growth and success.
© 2024 Strata SFR. All rights reserved.
