JLL Capital Markets has added a new director in Houston to its single-family rental team as some of the nation's largest homebuilders expand in the property sector.
Jim Humphries is joining JLL after spending the past eight years at Colliers’ Houston office, where he most recently served as senior vice president. He started doing middle-market single-family rental and build-to-rent investment sales in 2019, according to a statement.
Humphries will focus on single-family rental and build-to-rent investment sales across the nation for JLL, and work alongside the brokerage's single-family rental team's leader Matthew Putterman, who is also based in JLL's Houston office.
JLL is expanding its single-family rental team "at an opportune time as capital interest in the single-family rental and built-to-rent sector grows, driven by sustained rent growth and occupancy fundamentals,” Putterman said in the statement.
Last month, D.R. Horton, the nation's largest homebuilder, said it was making a big bet on its rental business because higher interest rates were leading to increased mortgage payments and making houses a harder sell. The company that entered the rental business that includes single-family rentals and apartment units in 2021 said it expected to deliver 6,500 to 7,000 rental units this fiscal year compared to 1,549 rental homes in fiscal 2022. Invitation Homes, the nation's largest owner of single-family rentals, also showed confidence in the property sector in July when it bought a portfolio of nearly 1,900 of those houses from Florida to Las Vegas in a roughly $650 million deal.
However, a recent report from capital markets shop Northmarq said the single-family rental and build-to-rent sector is primed for an uneven performance in 2023.
“Tighter capital markets will restrict transactions and make undertaking new developments more challenging. Despite these obstacles, renter demand in the sector is expected to be supported by a labor market that is outperforming expectations and a for-sale housing market that continues to price out potential first-time home buyers,” according to Northmarq’s analysts. “Longer-term, the outlook for the sector brightens — fueled by favorable demographic trends.”
Demand for single-family rentals should remain strong as high mortgage rates and a low supply of houses on the market means consumers would have a tougher time transitioning from renting to owning, according to Northmarq’s report.
Single-family rental units can command as much as 35% higher rents than a traditional apartment unit, according to Northmarq.