Caldwell Communities to Start its First Built-to-Rent Development

A Houston-area developer’s first foray into the already-hot Texas market for built-to-rent homes comes as the trend is getting a fresh push nationally in the form of rising interest rates.

Caldwell Communities is planning its debut project of 204 single-family rentals in suburban Tomball, northwest of Houston, the Houston Business Journal reported.

The 28-acre development, called Mirella, is at 1831 Bluegrass Park Lane, adjacent to a public middle and high school.

The Houston area has nearly 5,000 single-family homes under construction. It ranks third nationally by that measure, trailing Phoenix with 7,236 and Dallas at 6,841.

Developers brought a record 27,500 single-family rental homes to market nationwide last year, up 75 percent over 2022 and more than 175 percent over 2021.

Caldwell assembled the site in Tomball with buys from three landowners in 2022. Plans call for a gated community of 204 detached homes of several sizes.

Pre-leasing is scheduled to begin in the third quarter of this year, with rental rates ranging from $2,300 to $3,400.

About three-quarters of the homes will feature four bedrooms and one- or two-car garages. About 60 cottages will have two or three bedrooms. The development will take shape with a central lake and surrounding trails.

While the home sales market was lagging earlier this year, the single-family rental market was on the upswing. Nearly 4,000 leases were signed in March, a 5 percent year-over-year increase, according to the Houston Association of Realtors. At the same time, home sales fell 7.5 percent.

About 2,000 single-family rental homes were developed in Greater Houston between 2018 and 2023. Big players have gotten into the game, including the Howard Hughes Corporation.

The metro’s average rental rate hit a record $2,373 in June, up 1.3 percent year-over-year, according to the Houston Association of Realtors.