Austin’s Build-To-Rent Market Is Just Getting Started
Austin, Texas, has seen its largest influx in population over the past decade at nearly 35%. Dozens of corporations have relocated to the region, including Tesla, Samsung and Charles Schwab, expanding the local economy into one of the most prosperous in the nation and drawing people by the thousands.
While these trends have been great for the city in many ways, they have also exacerbated the need for more housing.
Out of the nearly 14,500 build-to-rent homes built last year across the country, almost 325 single-family for-rent homes were delivered in Austin — putting the metro area among the 10 most active BTR markets in the U.S.
“We're seeing different product types hit the Austin market, whether it's townhomes, horizontal multifamily or carriage-style homes,” Catamount Constructors Division President Mark Barton said. “The population growth in Austin and the I-35 corridor is driving demand, and given the current economic conditions, buying a home has become harder for many people, and the BTR market still allows this population group to experience neighborhood amenities.”
Catamount Constructors is a 100% employee-owned general contracting and construction management company with offices in Texas, Florida, Colorado and Georgia. The firm has delivered more than 2,400 BTR units totaling more than 2M SF.
To learn more about the Austin SFR market, Bisnow spoke with Barton and Catamount Vice President Bernida Chapman about the trends the sector is witnessing, how the company works with clients on SFR projects and the factors that have impacted market activity.
Barton will be speaking at Bisnow’s Austin Master Planned Communities & SFR Summit on Sept. 20, alongside other local real estate leaders and professionals. Register here.
Bisnow: Can you tell us about the growth that the Austin area has seen in SFR? Have economic factors impacted the market’s growth?
Barton: The growth in Austin has been substantial. Though other cities like Dallas already have an established presence in this market, the success of the Dallas market is now happening in Austin. Economically, with Tesla and some of the bigger plants coming into the city, these new workers need housing. Given the current economic conditions with trying to buy a first home, for many people, it’s very difficult to do this, and the BTR market fills this void.
Bisnow: What are the primary elements driving increased demand for SFR communities in the area? What trends are you seeing?
Barton: Corporate relocations to the Austin market and the I-35 corridor are driving market demand. We're seeing a lot of product types hit the market. This is different from some of the markets that we've seen. Austin SFR is operating at a higher level to cater to the needs of the clientele that's coming into the market.
Chapman: There's an appeal to having your own space with fewer or no adjacent neighbors. Not only are the sale prices of homes more expensive, so is the financing, down payment and cost of maintenance. SFR creates an alternative where you're capturing what would be potential homeowners, [those] who don't want the complexity and headache of maintaining or who simply cannot afford a home.
Bisnow: In what ways does Catamount help its clients with SFR projects?
Barton: We're a nationwide general contractor that provides a turnkey solution for the BTR market. We know the ins and outs of the markets we’re in and provide a level of pre-construction services that our competition doesn't, along with being able to execute in the field and deliver units more efficiently. The faster we can get units delivered to our clients, the better their performance is.
BTR and SFR properties also require background checks and more extensive application processes than single-family for-sale properties. Owners and operators of BTR and SFR properties have a vested interest to maintain the entire site, so the landscaping is constantly updated and the grass is always mowed. HOAs can only do so much in properties for sale.
Chapman: One of Catamount’s unique abilities is that our multifaceted team members have an array of construction knowledge across homebuilding, commercial and multifamily. We also have team members who have spent time on the developer side, allowing us to understand the underwriting process, how much schedule impacts the viability of a project, what the pressure points are from an owner/developer standpoint and how we can best address those needs.
In my previous role, I worked closely with municipalities getting projects through entitlement and permitting while educating both the local jurisdictions and neighbors on the benefits of BTR projects. BTR projects blend in seamlessly with neighborhoods. The impact of view corridors is much less than a traditional suburban multifamily building. BTR properties also come with a more mature clientele — someone who doesn’t want to live in dorm- or condo-style housing.
Bisnow: Can you detail Catamount’s approach to pre-construction when it comes to SFR? How does Catamount bring a fresh perspective to Austin’s SFR market?
Barton: Catamount brings horizontal knowledge to the market as well as the vertical work on the homebuilder side. We’re hearing that a lot of developers are having to use multiple contractors for BTR projects, with one handling the residential side and one doing the commercial spaces. Catamount is an all-in-one choice, and the way in which we've learned to build more efficiently and more economically is what sets us apart. We continually see our schedule being shorter and our first turn being faster. This is of major value to our clients to get their residents in the door more quickly.
Chapman: We want to help our clients in whatever way we can. My background in development is valuable in ensuring that the necessary approvals are obtained smoothly and efficiently, allowing the developer to focus on their next deal. We understand how to navigate the bureaucratic process, which helps contribute to the overall success of these projects.
Bisnow: Where do you see the Austin SFR market headed the rest of this year into next year?
Barton: We see this market continuing to grow in Austin. The population growth from Austin and the I-35 corridor, down into New Braunfels and even San Antonio, makes for a strong market. There's enough corporate relocation going on that is fueling the need for more housing.
Our BTR team recently won two projects outside of Austin with a repeat client we’ve been doing SFR projects with for the last four years. The Liberty Hills project is a 156-unit villa-style project with a small clubhouse. Rio Oaks is 260 units with 78 one-, 103 two- and 79 three-bedroom units spread across 25 acres. We expect the Austin market to continue to grow, and Catamount is ready for what’s to come.
This article was produced in collaboration between Catamount Constructors and Studio B. Bisnow news staff was not involved in the production of this content.
Studio B is Bisnow’s in-house content and design studio. To learn more about how Studio B can help your team, reach out to firstname.lastname@example.org.