As multifamily industry trends continue to evolve, developers must stay in the know to understand what consumers are looking for. Today, the industry is seeing an increase in build-to-rent properties, also known as single-units or horizontal units. This option provides residents the traditional multifamily benefits, but also the privacy residential neighborhoods offer. Experts say this lifestyle was common prior to the pandemic but the pandemic has aided in increasing the popularity of the product type. People want more space and still enjoy community, but several other factors play an effect.
RealPage, a leading provider of software and data analytics to the real estate industry, recently reported that Phoenix-based apartments increased 1.6% in occupancy within the last year, putting the Valley at 97.3% when the national average is 96.9%. While Phoenix sits as the fourth largest and fastest-growing city for multifamily construction projects, the Valley continues to be an attractive area for developers.
The combination of Phoenix being an attractive market and the rise of the build-to-rent trend has caused local developers, like P.B. Bell, to invest in new properties that offer this lifestyle. Additionally, offering residents the exclusivity and feel of “their own home” along with the benefits of living in a professionally managed multifamily community allows developers to naturally diversify their portfolios.
Compared to traditional multifamily developments, build-to-rent communities offer a combination of amenities consumers can’t find in a conventional community.
- Residents obtain more privacy and space in comparison to a standard multifamily community, providing comfort and convenience. Oftentimes, they even have a backyard!
- Residents still enjoy the community feels that traditional multifamily properties offer, such as taking advantage of amenities, on-site maintenance, upgraded technology within the units and more. Many of these perks are not found in residential real estate and homeownership.
- Build-to-rent is cost-efficient for the middle-class community as it’s the look and feel of owning a home.
While the housing market continues to stay competitive, build-to-rent communities give multifamily developers the ability to fill the gap and target the demographic who wishes to seek homeownership but simply cannot yet. As the rental market for residential neighborhoods continues to stay scarce, the multifamily industry has a huge opportunity to capitalize.
R. Chapin Bell is CEO of P.B. Bell, which specializes in the development and management of multifamily housing communities in Arizona.