PHOENIX, AZ – As the world grapples to tame the coronavirus pandemic and overturn the economic effects of this unprecedented event, commercial real estate (CRE) investors are monitoring all asset class financial positions to lessen small-term portfolio risk while augmenting investments for long-term growth. SVN | SFRhub Advisors, along with industry experts, predict ongoing consumer demand for housing will position single-family residential (SFR) rentals as an investment portfolio standout. A CRE brokerage firm, SVN | SFRhub Advisors, dedicated solely to SFR/BFR (Build-for-Rent) portfolios, recorded a 650% uptick in investment activity since mid-March 2020 for SFR/BFR portfolios on their technology platform, SFRhub.com, averaging 10,000+ listed homes.
Recent data from John Burns Real Estate Consulting (JBREC) outlines CRE sectors most likely to be affected following the pandemic, especially in the small-term, are hospitality, retail and office/co-working. Conversely, JBREC states SFR (while not unscathed in the small-term) should be positioned for quicker market recovery and a better long-term play. Housing rental defaults will prove painful in the small-term, but the low supply of newly built rental homes in most markets, and capital seeking safety, yield and inflation hedge, should help SFR recover earlier than other residential real estate asset classes.
Investors have reaped financial advantages of a 10-year bullish marketplace, notably the past few years with SFR portfolios, and the newer BFR market, said Jeff Cline, executive director and principal of SVN | SFRhub Advisors. For the first time in U.S. history, rental household growth outpaced U.S. home ownership. He added Looking ahead, consumer economic, lifestyle, and work-at-home popularity indicate global investors near and long-term outlook for capital growth and income opportunities in single-family detached homes for rent is better than it s been for several years.
BFR communities encompass single-family homes built from the ground up specifically for renters and not homeowners. These homes help to fulfill the vast housing need and rental shortage occurring across the U.S. According to JBREC, recently surveyed BFR projects had a very strong 97% stabilized occupancy rate prior to the COVID-19 pandemic.
U.S homebuilders may turn to REITs, private equity firms and individual investors to buy completed or near completed single-family communities for rental investment if the new home buyer market continues to retract. For the first time, we now have several private capital group clients with tens of billions of dollars to specifically invest in the BFR space, said Michael Finch, executive vice president of SVN | SFRhub Advisors.
Demand from millennials and older adults/retirees has destigmatized renting and touted SFRs’ benefits like increased space, yards and amenities representative of living in a single-family detached home. Skyrocketing unemployment, job uncertainty, and hefty student debt loans imply the SFR/BFR market should remain strong among millennials as home ownership moves farther out in time and remote working becomes more well loved.

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ST LOUIS, MO – San Francisco-based real estate investment firm Hamilton Zanze (HZ) has bought the 170-unit Steelyard & IceHouse Apartments (Steelyard) in St. Louis, MO. The deal closed April 10th. The buy marks the firm’s fifth acquisition of the year, second property in St. Louis, and first self-sponsored Delaware Statutory Trust (DST).
Steelyard is a Class A, mid-rise community located in Downtown St. Louis. The developer, LuxLiving, first renovated a 1924 warehouse (The IceHouse) in 2016 to make 42 desirable lofts with open-concept floorplans and state-of-the-art amenities. An additional 128 units (The Steelyard) were built on a neighboring lot formerly home to several small warehouses and industrial structures. The now combined community offers a mix of luxury studios, one-, two-, and three-bedroom units averaging 784 square feet in size with desirable amenities including smart home technology.
“Steelyard & IceHouse provided us an attractive opportunity to buy a new property in the up-and-coming neighborhood of Soulard,” said David Nelson, Hamilton Zanze’s managing director of acquisitions. “The property features a robust amenity package, prime location near Downtown St. Louis, and offers residents the quality of life provided by the city’s energetic urban core. As this is our second acquisition in the metro within the last six months, we are excited about our continued growth in the region.”
High-end community amenities include a saltwater swimming pool and hot spa, poolside bar, snack bar, barbecue and lounging area, dog park and washroom, rooftop entertainment deck, fitness center, and concierge service. Property management has been transferred to affiliated company Mission Rock Residential.
Steelyard is located in Downtown St. Louis. In 2018, the market ranked as one of the top 100 cities for business and careers, as well as education. The metro is largely supported by the healthcare industry and is home to several medical centers, including top ranked St. Louis Children’s Hospital. Other notable area employers include Anheuser-Busch, Boeing, and Washington University in St. Louis.

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CHATTANOOGA, TN – Hunt Real Estate Capital announced that it provided a first mortgage bridge loan in the amount of $27.35 million to finance the acquisition and renovation of a multifamily property located in Chattanooga, Tennessee.
Rise at Signal Mountain is a 280-unit, garden-style multifamily community located at 1185 Mountain Creek Road. The property consists of a 42.9-acre site and is comprised of 19 two- and three-tale residential buildings built in 1986. The property is 99% occupied.
The non-recourse interest-only first mortgage bridge loan features a 30-month term with three extension options.
The borrower is StoneRiver Company, LLC, a Birmingham, AL-based company founded in 1995 to manage real estate investments for high net worth individuals.
“Rise at Signal Mountain is very well located and benefits from solid access and visibility from roadway frontage,” said Chad Hagwood, Senior Managing Director at Hunt Real Estate Capital. “The borrower will invest just under $2 million in additional capital improvements post-closing.”
The borrower plans to complete exterior and common area/amenity upgrades to the property to bolster the property’s curb appeal and enhance the resident experience. Exterior renovations will commence in April 2020 and are projected to be completed in six to nine months.
“Given the intent of the new owner to upgrade the property with improved street appeal and to renovate unit interiors and common areas, the property is expected to perform very well over the coming years,” added Hagwood. “The borrower targets multifamily assets in growing markets with investments in either new developments or value-add investment strategies.”
“This city has emerged as a thriving economic region with strong job growth, a highly educated work force, and an innovative technology infrastructure,” stated Lou Davis, Vice President of Investments at StoneRiver. “StoneRiver remains bullish on the fundamentals of the Chattanooga market, and our team is focused on growing our multifamily portfolio there in the future.”

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