A Frisco-based developer is launching a multibillion-dollar effort to disrupt the build-to-rent market.
BTR communities have been popping up all over Texas, as many prospective first-time buyers are getting shut out of their respective single-family markets. Many big-name developers have hopped on the trend, but now there’s one with a plan to become the undisputed market leader.
Homz — pronounced like “homes” — was started by the well-known Patel family of the hospitality industry, which owns more than $1 billion in real estate across the U.S., U.K. and the Middle East. The new company says it wants to be the “Marriott of rental housing,” according to the Dallas Morning News. The company has announced plans to break ground on 50 communities — each a $140 million to $170 million investment — throughout the U.S. over the next five years.
Many of the Patel family’s hotels are under the Hilton, Marriott and Hyatt brands, which is what sparked the idea to develop a national brand identity in the growing single-family rental industry.
“If you think of Marriott as that global hospitality leader in the market, or WeWork as that global office platform or Uber as the global transportation platform, it’s very similar in concept,” said Dipika Patel. “We are trying to become that global housing platform.”
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Each Homz community will be built on 120 to 150 acres with 1,000 apartment units in complexes under four distinct brands — the more affordable UP and 24, then NJOY and LYF, which will have larger floor plans for roommates and families. The single-family rental communities will all include similar amenities such as clubhouses, pools, recreation, green spaces and even some hospitality, retail and office components.
“We’re making it all look and feel so each resident has the same experience regardless of where they go in the country,” says Patel. She told DMN that cities in Texas, Florida, Georgia and Alabama will see some of the first developments, but declined to provide the names of the cities due to legal agreements.
Homz has not yet purchased any land, but Patel said some cities have agreed to give the company land through incentive packages. Homz plans to hold onto its investment in each community for about 25 years. The goal is to break ground in five cities in 2023, each with a two-year construction timeline to put up the entire community.
While the developments will not be using affordable-housing tax credits or Section 8 vouchers, Homz says it aims to keep prices down through incentive packages from municipalities that will allow them to obtain low-cost financing. Construction will reportedly be financed with a “very low” 40-year fixed-rate mortgage through the Department of Housing and Urban Development, says Patel.
— Maddy Sperling