SFR Insider ? October 2023 ? SFR Market Insights Roofstock's Institutional Services Team + more

With over $6B in single-family rentals (SFRs) acquired, operated, and sold, Roofstock is a leading platform enabling institutional investors, real estate investment trusts (REITs), builders, and global asset managers to buy, manage, and sell SFR properties and build-to-rent (BTR) communities at scale.

Our institutional team represents buyers and sellers on the largest SFR portfolios in the market and has closed transactions totaling over 7,000 homes in the past 24 months. We prize ongoing collaboration with SFR owners and operators across the industry. We’re always available to discuss current market dynamics and offer our insights, irrespective of your current brokerage needs.

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Key Insights from Roofstock’s Institutional Services Team???

Heading into Q4, we’re hearing from large SFR investors that they’re starting to accept that market conditions are going to stay less than ideal for the foreseeable future. And they’re actively planning for how to best participate in the market for the rest of 2023 and beyond. Here are some of the key insights gleaned from those ongoing conversations.?

SFR Investors are Taking a Longer-Term View on Interest Rates

Interest rates have more than doubled since the beginning of 2022 and this has caused many deals to no longer pencil, making trades tougher to get across the finish line.

But it’s become increasingly clear over the last quarter that we’re going to be in an elevated interest rate environment for the foreseeable future. And there’s more inherent risk in continuing to pause participation in the market––particularly given what we know about the historical benefits of holding real estate assets over the long term. We’ve seen an uptick in large investors submitting offers on both Roofstock VIP, our institutional marketplace for individual acquisitions, as well as an increase in NDAs submitted for our active portfolios in the market. We expect to see a gradual rise in acquisitions over the next year as the most seasoned investors understand that the SFR sector’s fundamentals point to significant risk adjusted out performance of other real estate asset classes over time.

Looking for advice on how best to jump into the current market? Reach out to our team at [email protected].

Build-to-Rent Remains a Favored Space to Deploy Capital in the Current Market??

Our team was on the ground at the IMN BTR conference last month and got real-time feedback from the largest investors, builders, and operators in the space. Check out our key takeaways below:

• BTR sentiment remains very positive overall. Investors are seeing spread on yield wider than multifamily by 25-50bps, as well as better yields than their existing scattered site portfolios.
• There’s a big focus on whole communities. Investors are experiencing a larger bid/ask gap on scattered, completed homes due to the competition from the retail market.
• Equity is hard to come by, and the high cost of financing is impeding development on a larger scale.
• New developments slowed over last year, and investors expect that to continue until rates normalize. Developments under construction anticipate healthy absorption & lease-up. The deals currently getting done are long-term capital, betting on the overall success of the housing market.
• Some groups expressed that they would be open to negative leverage in the short term if they can acquire at a strong basis in quality locations.

Looking to invest in BTR? Reach out to our team at [email protected].?

Proactively Manage Your Institutional Portfolio of Assets with Roofstock??

At Roofstock, we offer a holistic approach across multiple channels to help you maximize returns on your institutional portfolio. Our team can provide a comprehensive portfolio analysis based on your unique needs and current market conditions––as well as provide strategy and execution on the best disposition.??In addition to our portfolio channel, Roofstock incorporates the following services into our sales execution strategy:

• Roofstock S3 (Scaled Seller Services), an end-to-end solution for institutional sellers to dispose of their assets on the MLS, at scale.
• Roofstock VIP, an institutional marketplace of inventory for our high-value acquisition partners
• Streetlane, our scaled property management service that was purpose built for institutional owners

Looking to employ a blended strategy with your portfolio? Reach out to our portfolio services team at [email protected]

Introducing Paul Briggs Head of Research & Investment Strategies?

As part of our effort to deepen Roofstock’s institutional capabilities, we’re pleased to welcome Paul Briggs, our new Head of Research and investment Strategies. Paul most recently served as Managing Director, Head of U.S. Research at BentallGreenOak. He has spent the bulk of his career developing original investment strategies driven by quantitative and qualitative research and advanced predictive models. His data-driven approach and strategic mindset will further position Roofstock as a trusted advisor for institutional capital interested in SFR opportunities.?

No Agency/Fiduciary Relationship: This newsletter, the information on the marketplace, and the information received from Roofstock employees is intended for informational and educational purposes only. It is not real estate, investment, or financial planning advice. Roofstock is not your advisor or agent unless expressly specified by Roofstock Realty, LLC. Please consult your own experts for advice in these areas.