3 Takeaways from IMN’s Build For Rent Forum

IMN’s 10th Annual Build-to-Rent, Land & Homebuilding Forum (West) brought together key players in the Build For Rent (“BFR”) industry to discuss the latest trends and strategies in the land and homebuilding markets. CoreVest headed to Las Vegas, Nevada to join IMN and meet with real estate investors and developers as they network and mingle, examine investment opportunities, hear about market trends, and explore their financing options. After two days of discussion panels, networking activities, and conversations with other industry leaders and real estate investors, the CoreVest team returned home with 3 key highlights from the conference. Here is our quick take:

1. Optimistic Outlook: Build For Rent Market’s Positive Trend

The sentiment regarding Build For Rent was notably positive, reflecting strong market trends and growing demand. Factors such as changing housing preferences, economic dynamics, and investor interest have contributed to this optimism. With a solid foundation and a continually expanding market, the BFR sector is set for a positive and enduring trend in the foreseeable future.

2. Rise of Private Lenders: Shifting Preferences in the Banking Landscape

Traditional banks are falling short of meeting the evolving needs of borrowers, both by choice and necessity. Many individuals and businesses are now turning to private lenders in pursuit of greater service and higher loan-to-cost (LTC) ratios. This shift in preference reflects a growing trend within the industry, where developers are actively seeking fresh partnerships and gradually disengaging from their existing relationships with traditional banks.

3. Consensus Emerges: Federal Reserve’s Rate Hikes May Be Done for the Year

The consensus among many attendees was the Federal Reserve has likely finished its rate hikes for the year. This consensus is influenced by customers’ perceptions that we’ve reached the peak of the rate increase cycle, with hopes of future refinancing at lower rates. Lenders are also on board due to ongoing supply limitations. The direction of weekly employment figures adds weight to this view, with continued declines reinforcing the idea that the rate adjustment phase is concluding.

Conclusion

In conclusion, the 10th Annual Build-to-Rent, Land & Homebuilding Forum highlighted the resilience and rapid growth of the BFR housing sector, emerging as one of the most robust and rapidly expanding segments in the real estate industry. While acknowledging a brief 2023 slowdown linked to economic factors, the overall outlook moving forward is distinctly positive, projecting a gradual recovery throughout the remainder of the year, with a stronger resurgence forecasted for 2024/2025. Overall, BFR housing remains a dynamic and evolving player in the residential sector with opportunities for forward-thinking investors eager to navigate these evolving trends.

We would like to thank IMN for inviting Joakim Mortensen to speak on the Capital Strategies Outlook panel, and Tim Leber and Yumna Zahidi for sharing their insights from the conference. The CoreVest team greatly enjoyed our conversations with investors and industry experts. We look forward to meeting more real estate investors at our upcoming events!