A major landowner is jumping into the hot build-to-rent sector.
Scottsdale, Arizona-based Walton Global Holdings, which has about 81,000 acres of developable land nationwide, says it is in advanced negotiations with major homebuilders to develop as many as 17 BTR communities totaling 2,500 units.
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Walton’s land bank provides it with an immediate competitive advantage in the build-to-rent space, according to the company, since suitable land can be hard to come by for this sort of development in many U.S. markets.
"There are many contributing factors affecting the availability of developable land that vary across the country," Walton Executive Vice President Paul Megler wrote in Builder magazine. "However, the main drivers that apply to most states involves the combination of lack of development financing and recent delays in development of lot inventory."
After a pause during the early coronavirus pandemic, homes started selling rapidly, making the land shortage worse, Megler said.
“The new-home inventory is being sold so quickly it has been difficult for builders to keep up with demand, causing delays on the availability of buildable lots in communities where the development and finishing of lots is trailing the sales pace significantly,” Megler said.
The privately owned Walton, originally a Canadian company that moved its operations to the United States in the 2000s, specializes in land acquisition, zoning and entitlements, with a history of partnering with national homebuilders. It has about $3.4B in assets under management.
“We see this as a tremendous opportunity to utilize our properties to provide additional single-family home inventory to growth markets throughout the country,” Walton CEO Bill Doherty said in a statement. “We also recognize land is a high commodity for builders and single-family rental companies to enter this space — we are a natural partner for them.”
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