With $1 billion in initial purchasing power, PCCP LLC has partnered with the California State Teachers’ Retirement System and a global institutional investor to invest in build-for-rent communities across the U.S.
The joint venture will target purpose-built single-family rental communities located in primary and secondary markets throughout the country. The joint venture’s portfolio will include both acquisitions and development opportunities of newly-constructed, well-amenitized and institutionally managed build-for-rent communities.
The PCCP team will be looking at markets that have strong job, population and rent growth as well as low to moderate cost of living. For example, the new platform has already closed on five single-family investments totaling more than $240 million in Atlanta; Jacksonville, Fla.; Nashville, Tenn.; and Raleigh, N.C. Last month, PCCP also formed a separate joint venture to develop a 180-unit single-family rental community in Jacksonville.
Jennifer Diaz, managing director at PCCP, said in prepared remarks that the joint venture is looking to build a geographically diverse portfolio of build-for-rent communities in key markets in the next 24 to 36 months. PCCP is also actively looking for local operating joint venture partners.
ADDRESSING NATIONWIDE SHORTAGE OF SINGLE-FAMILY
Jim Galovan, partner at PCCP, said in prepared remarks that the firm has identified an opportunity in the build-for-rent sector due to its current supply and demand. Galovan explained in his prepared statement that there is a nationwide shortage of single family housing, with the strongest demand for these communities coming from millennials and Baby Boomers.
According to Galovan, the housing shortage can be particularly seen with rental units ranging from 1,200 to 2,000 square feet as this range is less economical to build for developers. Galovan added in his prepared remarks that mid-size housing options combined with professional management and amenities is expected to garner higher rental rates than traditional apartments or scattered single-family rental options.
PCCP also pointed out that the platform’s strategy has benefitted from the post-COVID surge in demand for build-for-rent communities as more people are looking for more distance between their neighbors and more space to accommodate working from home.