September 22, 2023
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Greystar, a leading multifamily owner, developer, and manager, continues its expansion
Growing with its renters and their needs, Greystar, a leading multifamily owner, developer, and manager, continues its expansion in the single-family build-to-rent sector.
While Greystar looked at scattered-site strategies for single-family rentals coming out of the Great Recession, the company decided that was not in its core business and remained focused on multifamily housing where it could leverage its operational expertise. However, that began to change several years ago when it saw the demand for purpose-built, single-family rental communities that both add supply and are contiguous, which fit squarely within Greystar’s core business and leveraged the company’s expertise.
Greystar aims to serve its renters across all stages of life—from student housing, conventional multifamily, and essential housing to single-family rentals and active adult. The company’s purpose-built, single-family rentals are meeting the demand of households who are ready to move on to their next chapters and prefer to rent a single-family home or can’t afford to buy in today’s environment of elevated home prices and interest rates.
“This is a natural extension,” says Jordan Kabbani, senior director of investment strategy at Greystar. “We see that in our own data. When [residents] leave a conventional building, they go into single-family. And when the nation is chronically undersupplied in housing, we are adding new supply that is desperately needed. This is a desperate need in our own resident base that we are seeking to address.”
Under its Summerwell brand, a dedicated build-to-rent platform focused on developing purpose-built, single-family rental communities across the nation, Greystar has developed or acquired 12 communities. It also manages 50 single-family purpose-built communities with approximately 10,000 units. In addition, it has about 2,000 units in development.
“We recognized the strong demand for single-family homes and determined that a natural extension for us would be to build contiguous, build-to-rent communities where we could leverage our existing platform,” adds Kevin Kaberna, executive director and North America investment management leader at Greystar. “These communities are usually made up of 150 to 250 single-family homes that are detached or townhomes, where we can manage them like conventional multifamily with operations and maintenance personnel on site. This business adjacency made a lot of sense for us to expand into given strong fundamentals and similarities to multifamily.”
Greystar has been leaning heavily on its data and surveying its residents to understand not only what they are looking for in an apartment but where they are moving.
Kaberna says the company is predominantly focused on the “smile markets,” with a little more concentration in the Sun Belt. “We are going to continue to focus on those markets where we’re seeing our residents move to and where there is significant job creation. We are following the residents and getting out in front of the millennial wave.”
While there is a broad span of ages and incomes at Greystar’s build-to-rent communities, the company is focused on entry-level or attainable homes that focus on aging millennial households and the essential workforce.
When it comes to amenities, according to Kaberna, Greystar’s data shows that garages and fenced-in yards top the list. With children being a large impetus for making the move to a single-family rental, playgrounds also are more important than they are with conventional apartments. He notes that more focus also is put on the finishes and kitchens as people are spending more time in these homes than they were in their smaller apartments.
“There’s a wave of millennials that now have children and pets. They need more space, yards, and storage—with one of the most requested amenities being a larger garage. Yet they still want the clubhouse and amenities as well as the professional management that they have become accustomed to,” Kaberna adds.
A prime example of its work is Summerwell Sunterra in the top-selling Sunterra master-planned community in Katy, Texas, a Houston suburb.
Greystar recently broke ground on the 156-home community, which is located in one of the top school districts in the Houston metro. Summerwell Sunterra will include a mix of three- and four-bedroom detached homes and townhomes with a focus on families. Amenities will include a Crystal Lagoon, a clubhouse and patio, fitness and event lawns, a pool and lazy river, a playground, a park, tennis courts, and more.
“For us, this is the next chapter as people move out of apartments and into purpose-built single-family rentals,” shares Kaberna. “We’re looking to employ innovative operational practices with less people on site and utilize more technology where possible. We recognize there’s a real shortage of housing, and our solution is to continue to develop more homes and meet the needs of our residents.”
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