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- October 12, 2026
- Insights
If you look back to Q1 2026, the build-for-rent (BFR) space was moving pretty slowly. The reason was simple: many investors were still waiting to see what would happen next.
Today, as we enter Q4, activity has picked up substantially. What’s interesting is that the conditions that were holding those deals back six to eight months ago haven’t really changed all that much.
Instead, it’s been a change in perspective that has brought the market back to life. Instead of looking at current macro trends as something to wait out, most investors view it as the “new normal.”
Here’s what that means, and how we’re looking at the present and near-term future of BFR.
Investors Are Done Waiting for Lower Rates
For a long time, there was a sense that if investors could just hold out a little longer, interest rates would come down and the numbers would start looking better.
But we’re now several years into a higher-rate environment. Inflation is still higher than anyone would like, and there’s no guarantee that financing costs will return to where they were.
At some point, investors have to make decisions based on the market in front of them, not the one they’d prefer in a perfect world.
That’s what we’re starting to see. Investors have had time to adjust their expectations, reassess their numbers, and get a better sense of what projects can realistically deliver. And with capital that needs to be put to work, more of them are finding reasons to move forward rather than continue waiting.
There’s Room in the BFR Pipeline
There’s another interesting development happening on the supply side, too.
Take Phoenix, for example. It’s one of the country’s most established BFR markets, and there’s been an enormous amount of rental housing development there.
A lot of that development has been multifamily. Tens of thousands of apartment units have been in the pipeline. Depending on who you talk to, there’s something on the order of 30,000 to 50,000 units coming out of the ground over the next 12 months.
BFR is a different story. A lot of the BFR pipeline has actually come to completion over the past six months or so, and there’s not nearly as much behind it. So we’re seeing more BFR projects start to come around again to meet the anticipated demand.
So the opportunity for BFR development in some of these markets is still strong, even in cases where there’s a lot of new apartment supply.
For investors, that means it’s important to look carefully at what’s actually being built in a market, rather than treating all rental housing supply as interchangeable.
Have an Opportunity You’d Like to Talk Over?
We’re seeing more investors take another look at projects that might not have made sense six months ago. If you’re doing the same, I’d be interested to hear what you’re working on.
At Encore, we’ve got a pretty broad range of financing options, from bridge loans and lines of credit to rental portfolio loans and our recently launched DSCR program. That gives us a lot of flexibility to work with investors on different types of deals, and as their needs change over time.
If you’ve got something in mind, contact me at brad@encorefinance.com and we’ll talk it over.
