With a multimillion backing from JPMorgan Chase, Fundrise will develop 35 build-to-rent communities across the Sun Belt.
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The developments would bring up to 4,000 single-family rentals to Georgia, the Carolinas and Tennessee, among other areas. A $770M credit facility will enable the Washington D.C.-based direct-to-consumer real estate investment firm to double its BTR portfolio, making it one of the largest operators in the U.S., according to CoStar.
“Build-for-rent communities are the next great asset class in real estate,” Fundrise co-founder and CEO Ben Miller said in a statement. “As one of the leading [build-for-rent] platforms, not only are we building much-needed housing in high-growth markets, but also our investors will participate in the leading trends of real estate growth.”
BTR deliveries have surged by 270% since 2019 as rising costs pushed the prospect of homeownership out of grasp for many Americans. Nearly 25,000 units were completed last year, a 62% increase over 2022, according to National Rental Home Council data.
Still, there remains a lot of room for institutional growth, with investment volumes paling in comparison to traditional apartments, CBRE data shows.
Total BTR transaction volume averaged $2.4B in 2021 and 2022, and while that was a 250% increase over the prior five years, the traditional multifamily sector garnered $311B worth of investment during the same period.
Goldman Sachs previously provided a $300M credit facility for Fundrise to expand its BTR portfolio in the Sun Belt. The company has committed to building developments of single-family rentals rather than purchasing one-off properties from the Multiple Listing Service.
Today, the firm’s BTR holdings include 5,000 units valued at $1.4B, per CoStar. Ackman Ziff was the broker on this latest deal.
UPDATE, MARCH 11, 9:20 A.M. CT: This story has been updated to include the name of the broker involved.
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