Build-to-Rent: A Rising Force in Commercial Real Estate
Build-to-Rent (BTR) is quickly emerging as one of the fastest growing sectors in commercial real estate. With occupancy rates near 96% and more than $3.4 billion in dedicated financing, this isn’t just a passing trend, it’s a fundamental shift in how Americans are choosing to live. As affordability pressures mount and lifestyles change, renters are seeking more flexible living options that offer space and privacy without the long-term commitment of ownership. Smart investors and developers are taking notice.
While BTR is experiencing rapid growth today, its roots trace back to the post-2008 housing crisis, when the demand for alternative housing models began to rise. Initially more common in Europe, the concept has steadily gained traction in the U.S. over the past decade. This evolution has been driven by shifting consumer preferences, particularly among millennials and Gen Z, who increasingly prioritize flexibility, community amenities, and lifestyle instead of traditional homeownership.
Why Build‑to‑Rent Is Booming
The Walker & Dunlop 2025 Built‑For‑Rent Report highlights just how much momentum this sector has gained. Occupancy rates for BTR communities remain impressively high, a clear sign of sustained renter demand. What makes BTR so appealing is its ability to offer renters the experience of single‑family living—privacy, more square footage, and community amenities—without the long‑term financial commitment of homeownership. This lifestyle‑driven model attracts families, young professionals, and downsizing retirees. At its core, BTR isn’t really anything other than an alternative to multifamily investment, just with a different physical footprint. Sun Belt markets lead the nation in single-family build-to-rent (BTR) inventory, with Phoenix, Dallas–Fort Worth, and Austin ranking among the top metros for both existing stock and projected deliveries in 2025.
In addition to traditional Sun Belt strongholds, emerging markets such as Charlotte, Columbus, and Tampa are playing a larger role in Build-to-Rent expansion. According to Yardi Matrix, BTR communities are projected to account for approximately 6.3% of multifamily deliveries in 2025, increasing to 6.8% in 2026, demonstrating a growing share of national housing supply. Institutional and private equity investors remain active in the space, attracted by high occupancy rates and steady demand. As more developers enter the field, competition is intensifying not just for land, but also for community design features and amenities that resonate with today’s renters.
Affordability and Market Shifts Are Fueling Build-to-Rent Growth
BTR is expanding rapidly, driven by one key factor: affordability. According to Fannie Mae's April 2025 National Housing Survey, 35% of consumers said they’d prefer renting over buying if they moved—the highest share since October and above the long-term average. With mortgage rates hovering near 7% and home prices continuing to rise, renting is now about $440 per month cheaper than owning on average.
At the same time, the broader rental housing market is stabilizing. Barron’s reports that the apartment oversupply is easing, with multifamily completions down 28% since August 2024. This tightening supply is setting the stage for future rent growth and supports the increasing demand for single-family rental options like BTR.
Navigating the Challenges
While the BTR sector is full of opportunity, it’s not without its complexities. Developers today are navigating rising land costs, zoning hurdles, infrastructure expenses, and tighter project margins. These challenges can slow momentum if not addressed with the right strategy.
That’s where Coldwell Banker Commercial makes a difference. With deep market knowledge and a local-first approach, we help clients identify the right sites, understand shifting demand drivers, and build strong partnerships that keep projects moving forward. As build-to-rent continues to evolve, now is the time to get ahead.
