Case Study: Preliminary Market Assessment for Build-for-Rent Community
- Market Analysis
- For-Rent Single-Family Homes
Condition of Land
Noting the rising demand for Build-for-Rent (“BFR”) real estate, Tricon Residential, Inc. (“Tricon”), has engaged RCLCO to help define and quantify the market opportunity and provide strategic consulting regarding the development of purpose-built single-family rental communities in various markets across the United States. For this particular project, RCLCO focused its efforts on Willow Creek Manors, a planned 148-unit higher-density single-family detached rental development in Tomball, Texas.
RCLCO assessed the planned community’s position in the competitive market by evaluating its locational assets as well as relevant supply conditions and trends. From the research conducted, RCLCO determined that the site had many strengths, including high quality schools, strong regional access, and proximity to local services and amenities. While this would be the first BFR offering in the submarket, RCLCO was able to determine that there was likely unmet demand for this product type and that it would be more compelling to families seeking to rent than other competitive properties around Tomball. Because of these findings, RCLCO suggested strong rental rates near the top of the market in terms of absolute rents, for the planned unit program consisting of three- and four-bedroom units in the 1,450 to 2,100 square foot range.
RCLCO provided guidance to Tricon that included validating the demand for this product type as a new entrant to the local market, and provided likely price positioning, absorption rate, and underwriting metrics that helped guide the development process. Tricon continues to move forward with the development, which has an anticipated ground-breaking date in the second half of 2021.VIEW MORE CASE STUDIES