The Great Gulf Group has found two partners for a venture to deliver at least 1,000 build-to-rent single-family homes each year throughout the U.S.’s sunbelt states.
Great Gulf alongside Westdale Real Estate Investment and Management and a global institutional investor formed a partnership that will focus on sourcing land opportunities, developing, building, owning and operating dedicated single-family rentals. The partners have already committed an initial $200 million of equity to the venture with the potential to double the initial investment.
Ilias Konstantopoulos, Great Gulf’s CEO, told Multi-Housing News that the partners currently have three projects totaling 500 units located in Texas, Florida and South Carolina. The venture’s first communities are expected to be open to residents in May 2021, Konstantopoulos also told MHN.
Looking ahead, Konstantopoulos told MHN that the partnership is looking to deliver as many as 2,000 communities per year with initial target markets in Texas, Florida, Georgia, Arizona, South Carolina and North Carolina.
CAPITALIZING ON A SUPPLY IMBALANCE
Konstantopoulos explained in prepared remarks that the partners expect a roughly 5 to 1 demand-supply imbalance in the near-term with current annual demand estimated at 250,000 newly-built single-family rental homes vs. the current annual supply of approximately 50,000.
Konstantopoulos also said in prepared remarks that the demand is coming from the lifestyle and lifecycle changes from the Millennial, Gen X and Baby Boomer demographics. He added in his prepared statement that the partnership expects the demand for single-family rentals to continue to see unprecedented growth, especially in the U.S. sunbelt states. The demand also saw support from the “renters by choice” trend which was accelerated by the effects of COVID-19, Konstantopoulos added in prepared remarks.
Similar to Great Gulf’s partnership, PCCP also jumped on the supply-demand imbalance and formed a joint venture to also pursue build-to-rent single-family rentals throughout the country. PCCP’s joint venture with California State Teachers’ Retirement System and a global institutional investor was formed in March with $1 billion in initial purchasing power.