Writer: Joshua Andino
2 min read February 2023 — Even as the national residential real estate market seems to be in the middle of what could be described as a correction, Dallas-Fort Worth is receiving its latest residential build-to-rent community, indicative of a growing rental trend across the market.
LEO at Bethel Place, the joint venture between TruLife Communities and Advenir Oakley Capital, will be located in Weatherford, just about an hour outside of Dallas proper. The community, totalling 200 units, will be a mix of one, two and three-bedroom cottages for rent. Site work has already begun, with full delivery expected in 2024.
“We’re thrilled to be starting site work on this project and bringing our vision for high-quality rental homes to life,” said Matt Farris of TruLife Communities, in a prepared statement. “This development is a testament to our commitment to the Weatherford community and our belief in the power of partnerships to create great places.”
Prices are expected to range from $1,650 for a one-bedroom unit, $2,100 for a two-bedroom, and $2,350 for three-bedroom units.
The project represents the ongoing shift toward single-family homes being built specifically for rentals, as opposed to traditional purchases. “This is a new product, but it’s a product we see growing across the nation,” Mayor Paul Paschall said at the time of the project’s approval last year. “As our community grows and emerges, we’re just going to have to understand that not everybody wants to live on land and property, or in just a neighborhood with three-acre lots like we do.”
Historically, build-to-rent or built-for-rent communities were a small part of the U.S. housing market. Over the 2000’s and spurred in part by the Great Recession’s housing crisis, individual investors, hedge funds and private equity groups increasingly entered the single-family home rental market, which accounted for over 50% of the gains in rental housing stock from 2005 to 2015. Since then, groups such as Blackstone, Starwood Capital, or in the case of Bethel Place – Advenir Oakley, have begun developing entire communities of single-family homes for rent. Toward the end of last year, BTR communities accounted for just over 9% of all residential construction in the DFW market.
The market is expected to continue its current growth trajectory even as traditional housing starts are down. Rising interest rates will continue to make home-purchases cost prohibitive for some buyers, forcing them to look at rentals instead. According to Northmarq’s 2022 reportopens PDF file on the segment, the Southeast region accounted for 63% of new housing starts in the nation for BTR housing, with Dallas-Fort Worth being one of the leading markets in the region.
“Recent activity in the South region has been led by several new developments throughout Texas. Dallas-Fort Worth remains one of the top markets for employment growth and demand for all forms of housing, including single-family rentals,” the report states. Investors will be able to take advantage of the softer for-sale housing market to buy properties for rental conversions, the report adds.
Despite the potential growth in the sector, BTR is subject to some of the same challenges as traditional apartment rentals – namely the greater demand for amenities and concerns around affordability. Nevertheless, the Northmarq report concludes, “With their purchasing power cut, current renters who were looking to purchase first homes will likely need to wait a while longer until mortgage rates decline and/or housing prices creep lower. This lag should continue to support demand for single-family rentals, particularly those properties that offer the newest in smart-home technologies and amenities.”
Bethel Place aims to feature those amenities, including on-call maintenance, outdoor pavilions and grill stations, a central club-house and pool, dog park, pickleball courts.
“We’re excited to be working with TruLife Communities on this new build-to-rent development in Weatherford,” said David Oakley of Advenir Oakley. “This project represents a great opportunity for us to bring our expertise in real estate development to the table and create something truly special for residents in the area.”