By Angela Gonzales | Phoenix Business Journal
The burgeoning build-to-rent sector has about 9,500 units under construction in metro Phoenix, adding to existing inventory of about 8,700 units, according to a report released by Northmarq.
“We’ll be seeing the local inventory of single-family build-to-rent units doubling in the next 18 to 24 months,” Peter O’Neil, research director for Northmarq, told the Business Journal.
Even doubling inventory in this rapidly growing sector, the housing market will still be undersupplied, said Trevor Kosovich, president of Northmarq’s investment sales platform.
Separately, a report by Washington, D.C.-based Up for Growth found that Arizona has a housing deficit of 122,683 homes, representing a 1,377% increase since 2012.
“We need more housing of all kinds,” said Mike Kingsella, CEO of Up for Growth. “We need more rental housing, we need more ownership housing, we need more multifamily we need more single-family homes. We need to encourage more housing of all kinds.”
Build-to-rent outperforms other rentals
Kosovich said the build-to-rent sector in metro Phoenix continues to outperform traditional garden-style apartments, offering detached single-family homes for rent with small backyards. Many of these communities have rich resort-like amenities, including a clubhouse, fitness center, pool and dog park.
As home prices continue to escalate amid high mortgage interest rates, many renters are turning to the build-to-rent sector.
And investors are taking notice.
Kosovich and his team recently brokered the $119.7 million sale of TerraLane at Canyon Trails in Goodyear and the $66.2 million sale of TerraLane at South Mountain in Phoenix.
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Related: Arizona Housing Deficit Up 1,377% in 10 Years