Two firms known for developing and managing student housing partnered up to get into suburban single-family rentals.
Chicago-based developer Core Spaces and investment management firm Harrison Street announced a $1.5 billion venture to build homes as rentals in cities including Austin, Denver and Orlando. The firms will be targeting sites near job centers to appeal to young families who aren’t ready to buy as well as older renters looking to downsize.
“Affordability challenges in the U.S. housing market and changes in lifestyle preferences are driving demand for single-family rentals and we believe our progressive design and hospitality-driven approach will differentiate our build-to-rent communities in the single-family rental market,” said Dan Goldberg, President of Core Spaces.
Rising home prices during the pandemic have turned buyers into renters. The S&P CoreLogic Case-Shiller Index reported a 19.1 percent annual gain in home prices in October, the fourth-highest reading in the 34 years covered by S&P Dow Jones Indices.
Large institutional investors and private equity firms are showing interest in single-family rentals, an asset class that grew during the pandemic amid a record low inventory of homes available for sale.
In June, Blackstone agreed to buy Home Partners of America, owner of more than 17,000 homes across the U.S. for $6 billion.
Harrison Street developed and acquired more than 27 student housing communities for about $1.3 billion since 2007. The two firms previously teamed up to build student housing at schools including University of Illinois at Urbana Champaign, University of California Berkeley and University of South Florida.
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