The 10th Annual Build-To-Rent, Land & Homebuilding Forum of the West

Encore Finance is thrilled to have attended the 10th Annual Build-To-Rent, Land & Homebuilding Forum of the West. We gained valuable insights into the evolving real estate landscape:

1. The enthusiasm that once permeated the asset class has given way to a more discerning approach among investors. They’re becoming highly selective when it comes to choosing projects, sponsors, and markets. One key factor driving this shift is the expectation that interest rates will remain “higher for longer.” Market participants are adapting by recalibrating their return models to embrace this new normal.

2. Operating expenses, notably property insurance, are on the rise. This upward trend is putting pressure on pro-forma cash flows, challenging the financial viability of many projects. However, amidst these challenges, there remains a strong sense of optimism surrounding the Build for Rent (BFR) asset class. 🏘️

3. What sets BFR apart? It’s a naturally supply-constrained asset class due to its low density. Moreover, the increasing cost of homeownership is driving a surge in demand for rental homes, creating a favorable supply/demand equilibrium.

Encore Finance believes in the resilience and potential of the BFR asset class. We’re excited to be part of this dynamic industry and look forward to working alongside our partners to navigate these changing dynamics.