RangeWater, Harbert Acquire Texas SFR Community

Downtown Austin is less than 20 miles away.

RangeWater Real Estate and equity partner Harbert US Real Estate have acquired a single-family rental community in the Round Rock submarket of Austin. The joint venture purchased Rock Springs Duplexes at 1338 Christopher Ave.

Rock Springs Duplexes was constructed in two phases, Phase I in 1985 and Phase II in 1996. The community features 108 three-bedroom, two-bathroom homes and 43 three-bedroom, 2.5-bath units. They range from 968 to 1,280 square feet.

In-home amenities include an attached garage, washers and dryers, a gas stove-top and oven, wood plank vinyl flooring and private backyards. The community features a fitness center, coffee bar and community kitchen. RangeWater intends to make improvements to the property.

Residents are located nearby the Dell headquarters as well as the future corporate campuses of Apple and Samsung. The Pitch, with bars, gold courses, pickleball courts and dining options is also in proximity. Downtown Austin is less than 20 miles away.

RangeWater currently manages over 2,300 units across Texas. This is its third asset in the Austin metropolitan area and the company’s first venture with Harbert. RangeWater will serve as property manager for Rock Springs Duplexes.

RangeWater in Texas

“Austin is an attractive location because of its growing, highly educated population base, and its diversified economy bolstered by high-end tech jobs, quality of life factors and a competitive cost of living,” Michael Hoy, acquisitions managing director at RangeWater Real Estate, told Multi-Housing News. “Over the past decade, the city has enjoyed a sustained economic and population expansion period as local companies increase their business capacity and others relocate to this attractive central U.S. location.”

RangeWater Real Estate will further expand its build-to-rent footprint by developing a 121-unit community in Corinth, Texas. NTT Urban Development Corp. provided equity for the project. The developer plans to break ground in September. In 2022, the Planning and Zoning Commission of the City of Corinth unanimously approved the development, which was then dubbed Greenway Trails.

RangeWater’s most recent development, The Darby, completed in 2024, is a 350-unit multifamily project in Manor, a suburb of North Austin. It features one-, two- and three-bedroom apartments as well as three-bedroom townhomes.

A “fickle” market

Berkadia’s October SFR Update pointed out that just four weeks ago, the outlook for single-family land was “rosy,” as Treasury rates had rallied and 30-year mortgage rates had fallen to their lowest level in two years. Unfortunately for those prospective buyers, rates have since reversed, and the “fickle” market, as referred to by the report, has adjusted its projections for future rate cuts.

Activity in the SFR market is highly correlated to mortgage rates. Roughly 60 percent of homes in the US carry a mortgage. Nearly one-third of those outstanding mortgage balances were refinanced during the post-COVID years’ refinance boom and ultra-low-rate environment.

According to Berkadia, more than three-quarters of homes with mortgages have rates below 5 percent, which jumps to more than 85 percent if the mortgage rate bar is raised to 6 percent.

As for Texas, Matthew Putterman, managing director and single-family rental leader with JLL, told MHN that while rents remain level in most markets across the country, implementing concessions in heavily supplied submarkets has impacted effective rents on newly built projects.

“Fully stabilized communities work to retain quality residents, limiting turnover time and expense,” Putterman said. “Home values in parts of Central Texas have declined from their 2022 peaks, but housing throughout Texas remains among the most affordable, on a relative basis, across the country.”

Housing preferences shift

Doug Ressler, manager, business Intelligence, Yardi Matrix, told MHN the build-to-rent market in Texas is experiencing significant growth, driven by several characteristics. These include a shift in housing preferences, particularly among millennials and empty nesters who have a preference towards renting.

“The sector attracts substantial interest from institutional investors thanks to its favorable fundamentals and potential for superior revenue growth,” he said.

Ressler also noted that the supply of BTR units is growing rapidly. For example, the total US supply increased by 55 percent from the first quarter of 2023 to the second quarter of 2024.

“BTR developments are usually located in less dense suburban or exurban areas, providing a neighborhood feel with easy access to urban centers,” Ressler said. These factors collectively contribute to the robust growth and attractiveness of the BTR market in Texas.

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