Middleburg Communities has launched the first four developments of its new Single Family Rental (SFR) communities’ strategy called The Hamlet, with locations in Alabama, Florida and North Carolina. The company has another 16 projects under contract and more than 20 in its pipeline.
The first of the four to close is The Hamlet at MidCity in Huntsville, Ala., which will include more than 200 two- and three-bedroom single-family detached cottage homes and 36 one-bedroom duplexes, master-planned around shared open green spaces, community gardens and ponds.
The development, located at 1044 Old Monrovia Road NW, has an open farmers’ market green at the entrance to the property. Residents will have access to a resort-style pool, state-of-the-art fitness center, clubhouse, dog park and pet spa, grilling stations, fire pits and package lockers. Construction is slated to being at the end of this month and it is expected to be substantially completed by January 2023.
The next three to follow will be The Hamlet at Quail Crossing in Raleigh-Durham, N.C.; The Hamlet at Falling Creek in Richmond, Va.; and The Hamlet at Wildlight in Jacksonville, Fla. Middleburg will be closing on these three properties before the end of this year. Construction for each community should start soon after closing. Company officials said all four of the planned locations are in rapidly growing metro areas with healthy rental markets.
The concept, announced in September, will blend the comforts of single-family homes with the feel of a neighborhood and maintenance-free living. Middleburg expects those interested in The Hamlet properties will be current multifamily apartment residents, existing single-family home renters and would-be buyers. The communities will be located in high job growth Southeastern markets near major arterial highways, grocery and other retail stores, entertainment and healthcare services, quality school districts and job centers. The design emphasizes shared outdoor spaces and pedestrian-friendly tree-lined streets for sustainability and walkability.
Middleburg Communities CEO Chris Finlay said in a prepared statement the company plans to be a dominant developer of SFR communities across the Southeast. He noted Middleburg’s design concept and community styling are aimed at a growing population of renters in markets in which the company has extensive experience. Middleburg, founded in 2004, is a multifamily development, investment, construction and management company operating in the Southeast and Mid-Atlantic regions. The company has acquired and developed more than 21,000 apartment units and executed more than $3 billion in transactions.
Patrick Lynch, Middleburg’s vice president for research, stated in prepared remarks that industry research and Middleburg’s proprietary studies made a compelling case for SFRs due to a strong and unmet demand for the product. Middleburg research showed that 83 percent of the existing stock of single-family rental product was more than 20 years old and often required high maintenance with uneven management practices.
The SFR market has been growing, often fueled by transactions and projects involving institutional investors. Earlier this month, SFR company Mynd partnered with global real estate investment manager Invesco Real Estate, aiming to be one of the largest buyers of SFR homes in the U.S. Mynd expects to deploy up to $5 billion to acquire 20,000 to homes.
In April, real estate investment firm DivcoWest committed $250 million in equity in a joint venture with Atlas Real Estate with the goal of investing $1 billion into acquiring and renovating SFR homes throughout the West. Homebuilder Lennar Corp. launched a $4 billion SFR platform with institutional investors including Centerbridge and Allianz Real Estate in March.
Also in March, the Great Gulf Group partnered with Westdale Real Estate Investment and Management and a global institutional investor with $200 million in equity to build 1,000 to 2,000 SFR homes a year.