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ARIZONA
Building Single-Family Rental Communities
Taylor Morrison, in a partnership with Christopher Todd Com-
munities, has announced that it will be building a single-family,
rent-only communities in Arizona. CNBC reports that these com-
panies will be building homes aimed at selling to investors.
Other companies, including Lennar and Toll Brothers have
recently started building homes for rent. Lennar sells its properties
to investors, while Toll plans to hold the properties in partnerships.
ough the initial plan is to sell to investors, Taylor Morrison
CEO Sheryl Palmer told CNBC that they will consider other op-
tions in the future.
"We'll determine the right time in the lease-up process to sell
the assets. ere is plenty of money out there, so we could look at
a REIT or private investors, but our intent will be to divest in a
pretty timely fashion," Palmer said. "As we look at the best way to
optimize price and returns, it might be to do something on our own
and create our own fund or REIT, but sell them out of the Taylor
Morrison land portfolio."
As home prices increase, the single-family rental market has
been expanding. According to Palmer, half of Christopher Todd's
current tenants are millennials and half are baby boomers, accord-
ing to Palmer.
"e profile of consumers in Christopher Todd shows that these
are not people who can't afford to buy, they choose not to buy," she
said.
Data from CoreLogic also indicates that single-family rent-
als are increasing. CoreLogic's Single-Family Rent (SFR) Index
increased 4.1% since January 2018, according to CoreLogic's SFR
report, noting that low rental home inventory, relative to demand is
fueling the growth of single-family rent prices.
"Single-family rentals make up one-half of all residential rent-
als but are an overlooked segment of the housing market," said
CoreLogic Principal Economist Molly Boesel. "Much like the rest
of the housing market, single-family rentals are affected by market
forces and fell rapidly during the Great Recession. ey have since
bounced back strongly from their low point in 2010, mirroring
house price growth."
