text: The build-to-rent (BTR) sector has expanded significantly over the past five years and is expected to perform well long-term despite a recent slowdown in new project starts. The market currently encompasses about 350,000 units but is projected to increase by nearly 50%, according to CBRE's 2024 BTR residential market overview.
  Most BTR communities consist of more than 50 homes or townhomes that operate similarly to multifamily assets but without vertical stacking. Properties are typically owned by investors and professionally managed. Sub-categories within the BTR sector are horizontal multifamily developments, single-family detached (SFD) and single-family attached (SFA).
  The BTR sector is one solution addressing the nation's 3.1 million unit housing shortage by targeting millennials and empty nesters with flexible amenity-rich rental communities. Both groups are fuelling demand for large BTR developments, the CBRE report said.
  Other drivers include the high cost of home ownership, remote work and population migration trends. For investors, BTR is attractive due to rent growth and low vacancy rates, strong net absorption, product diversification and exit opportunities.
  "Build-to-rent is a vital part of the solution to the housing shortage, providing high-quality, family-friendly rental options with unparalleled flexibility," said Matt Vance, Americas head of multifamily research at CBRE. "Five years of consistent growth and strong market fundamentals have attracted substantial institutional investment."
  The average monthly rent for a BTR unit reached $2,181 during the second quarter, a 1.5% year-over-year increase, according to the report. This growth significantly outpaced traditional multifamily rent growth, which was 0.3%.
  Investor interest in the sector remains strong, although activity dipped 40% last year from its peak of $1.6 billion. This is still more than double the average level before the pandemic, demonstrating strong investor confidence in the sector's robust revenue growth and lower resident turnover, said CBRE.
  BTR is performing particularly well in Sun Belt markets, led by Phoenix and Dallas-Fort Worth, the nation's largest BTR markets with more than 10,000 units each. Texas BTR growth is benefiting from Sun Belt in-migration, and Charlotte and Austin are expected to double their existing BTR inventory as they lead the BTR construction pipeline.
  Midwest markets are also attracting BTR momentum. Minneapolis, Cleveland and Kansas City are showing the strongest growth for the sector thanks to lower vacancy rates and smaller construction pipelines.