Knighthead Funding in partnership with Speedwagon Capital Partners arranged a $27 million refinancing for Signature Music Row – a newly constructed 105-unit Class A multifamily property located at 1005 16th Avenue South in Nashville, Tennessee.

Preiss utilized the loan to refinance its construction loan. Preiss is a privately held student housing owner, developer, and operator. Located in Nashville’s Music Row neighborhood, the apartment complex is near Vanderbilt University, which is within walking distance.

Situated on a 0.64-acre site, the six-story midrise property features a mix of studio, one-, two- and three-bedroom apartment homes, as well as townhomes. Residences have private patios or balconies.

Amenities include an elevated outdoor pool, an outdoor grilling area, a resident clubroom, a sixth-floor sky lounge, and a fitness center. The property also includes a ground-level retail space occupied by Silver Fox Coffee Lounge.

BRP Companies and The Prusik Group have updated their plans for the Mall West End property after it shuts down. With the mall set to officially close at the end of January, the development team has been working with legacy tenants to ensure that the uniqueness of the West End is preserved and upheld throughout the transformation.

During construction, several long-standing mall tenants will be relocated to a temporary on-site space at 850 Oak Street.

Once complete, One West End will feature 125,000 square feet of retail, including a grocery store, fitness center, diverse dining options, and local boutiques. The residential component will feature approximately 900 mixed-income residences, a mix of studio to three-bedroom units, with affordable units available to those earning between 50% and 80% of the area median income (AMI). Additionally, the development includes student housing, a planned 150-key hotel, and 12,000 square feet of medical office space.

Phase One of the redevelopment is expected to be completed in 2028.

The owners of Birkdale Village in Huntersville want to add office space, a hotel, apartments and expand the retail offerings. A development group made up of North American Properties, Jamestown and Nuveen Properties is hoping to get a zoning change that will allow them to change the current plan and build a $180 million expansion.

The Charlotte Business Journal reports the details include a 125-room hotel, 150 multifamily units, 122,300 square feet of office space and 26,715 square feet of retail space.

The office building, which includes ground-floor retail space, would be developed at the site of an existing Barnes & Noble store. The 150-unit multifamily building is being planned for the current site of Dick’s Sporting Goods at Birkdale Village. The hotel would be across from the office building.

Birkdale Village is currently 100% occupied and includes around 250,000 square feet of retail space, 50,000 square feet of office space and 320 apartments.

South Hills Mall will finally get its new look. Three years after spending $38.4 million to buy the mall in Cary, the town has greenlighted developers to build a mixed-use project on the 44 acres.

Loden Properties and Northpond Partners are the team behind the large project, which calls for a mix of residential, office, hotel, retail and a sports complex. A bond referendum on the November ballot in Cary would provide funding for the sports complex.

The timeline for the 44.35-acre development will span 10 to 15 years, with Loden and Northpond planning to start construction late next year. In addition to 1,755 residential units and 350 hotel rooms, here’s what Loden and Northpond are looking to bring to the site:

• 935,000 square feet of office space
• 550,000 square feet of retail/commercial space
• 328,000 square feet for a community and sports recreation center
• 235,000 square feet for research and lab space

Massachusetts Gov. Maura Healey said Thursday that Lifespan Corporation has filed an asset purchase agreement (APA) to acquire and operate Saint Anne’s Hospital in Fall River and Morton Hospital in Taunton and that Lawrence General Hospital has filed an APA to acquire and operate both campuses of Holy Family Hospital in Haverhill and Methuen. All four were among the remaining Steward Health hospitals in Massachusetts following the Dallas-based operator’s bankruptcy filing in May.

Financial terms were not disclosed. The Lifespan and Lawrence General agreements will have to be approved by the bankruptcy court at the upcoming hearing on Sept. 4. The state will support these new operators for a limited time, Healey said.

Still to be finalized is Boston Medical Center’s takeover of Good Samaritan Medical Center in Brockton. The Healey-Driscoll administration is also in the process of taking control of Saint Elizabeth’s in Boston through eminent domain to facilitate the transition to a new owner, Boston Medical Center.

Pictured: Holy Family Hospital in Haverhill, MA.

Lee & Associates finalized the $18-million sale of a four-story, 86,459-square-foot building at 777 E. 10th Street in Los Angeles. The seller foreclosed upon the property in February of 2022.

Matthew Sullivan, managing broker of Lee & Associates Investment Services Group, represented the seller in the transaction, CSAIL 2015-C1 Commercial Mortgage Trust. Jim Halferty and Mike Smith of the Lee & Associates Commerce office represented the buyer, Very J, Inc.

The property was 43% occupied at closing and the buyer will occupy several floors of the property as their corporate headquarters. Built in 2009, 10 Crowne Wholesale Center is located between Crocker Street and Towne Avenue in the Los Angeles downtown fashion district.

Zillow’s exit from the house-flipping business created an opening for investors bullish on the single-family rental market, with an inventory of 9,800 houses nationwide up for sale. 

Single-family rentals are still a relatively small part of the U.S. residential market, but investors are now betting on surging demand for such properties in the wake of rising house prices exacerbated by the coronavirus pandemic. 

Investors are also betting on something else: a long-term shift in demand away from apartments and toward single-family houses, especially among the generation rising after millennials. They might not be able to quickly afford to buy a house like their parents or grandparents, but data shows they want to live in one.

Among members of Generation Z between 18 and 23 years old surveyed by the National Apartment Association, 43% of respondents say they want to rent a single-family detached property after entering the workforce, while 44% would prefer to live in a “vibrant suburb,” compared to the 23% who would prefer the city. 

Investors want to make that happen, with a growing number of companies throwing their hats into the single-family rental ring. 

These players could win big under such a shift in demand from the multifamily sector, though the SFR product has headwinds similar to that of the typical residential market: a lack of inventory. 

“There’s a lot of capital looking to invest in this space but few executable projects,” IHP Capital Partners Senior Vice President Jeff Enes said. “Resale inventory remains low in many markets, and for developers, there tends to be a protracted entitlement process, which makes it difficult to bring new product to market.”

Interest in the sector is encouraged by renter demand from new demographics and incentives for build-to-rent product, which has an 8% annual return on average, The Wall Street Journal reports, citing Green Street data. That is the highest of any property sector tracked by the firm. 

“Building upon our experience, IHP is looking to expand that business in multiple markets,” Enes said. 

IHP Capital provides equity for homebuilders in the West, where it is currently involved in 37 residential projects. IHP is also pursuing single-family rental projects. Through an affiliate, IHP is developing five single-family rental communities in Phoenix, one of the hotter single-family rental markets.

Most single-family investors are still small operators, many with just one investment property. Larger investors owned about 300,000 single-family rental houses as of 2019, according to Laurie Goodman, vice president for housing finance policy at the Urban Institute, while small-scale investors own 15 million units. But larger investors are seeking to expand their presence in what they see as a growth market.

JLL Income Property Trust recently jumped into the game by purchasing a 47% interest in a portfolio of over 4,000 homes assembled by Amherst Residential, which manages the properties. The company paid about $560M for its share of the houses, which are in such markets as Atlanta, Dallas, Phoenix, Nashville, Tennessee, Charlotte, North Carolina, and Tampa, Florida. 

The company flagged single-family rentals as a “near-core property sector poised for accelerating institutional capital inflows,” JLL Income Property Trust President and CEO Allan Swaringen said in a statement.

“Given the superior long-term tenant demand growth outlook, our research projects long-term expected rent and NOI growth above all other institutional property type averages,” he said.  

Zillow could serve as a source for expansion for single-family rental investors. A company spokesperson told Bisnow the firm will sell the remaining inventory “the same way we always have, by selling to buyers of all kinds, including individuals, families, individual investors, institutional investors and nonprofits.”

Bisnow Archive/Ian Johnston

Regardless of the ultimate disposition of those particular properties, the demand for those homes is clear. 

During the third quarter of 2021, real estate investors bought 18.2% of all U.S. homes purchased, up from 11.2% the year prior, according to Redfin, and representing the highest percentage on record since Redfin began tracking the market in 2000.

The Q3 percentage represents 90,215 residential units, with investors paying nearly $64B for the properties, up from $59B in the second quarter and $36B a year earlier. 

Some markets are attracting more investor interest than others, according to Redfin. In Atlanta, about one-third of homes sold in the third quarter were snapped up by investors, the highest rate among the 40 metros the company analyzed. Next were Phoenix, Charlotte, Jacksonville, Florida, and Miami. 

Those markets have seen steady year-over-year increases in multifamily rents, and the addition of SFR inventory could potentially level out those gains. 

Spurred by a 5.7% rent increase in Q2 2021 alone, the average effective apartment rent has risen in Metro Atlanta by 11% year-over-year, Marcus & Millichap reports. Phoenix, meanwhile, has seen apartment rents spike 20% since August 2020, according to ApartmentList.com.

The larger backdrop of demand for single-family rental housing is the frenetic overall U.S. housing market. 

In 2020, existing-home sales rose 6% year-over-year while new single-family home sales spiked by 20%, putting total home sales at their highest level since 2006, according to the Joint Center for Housing Studies at Harvard University.

Meanwhile, rents in institutionally owned SFR portfolios grew more than 3% annualized in 2020, according to data from DBRS Morningstar. The pandemic was at work: Reduced mobility pushed more individuals and families to rental homes with more space.

The activities of single-family investors will drive home prices up further, critics say, especially in growing metro areas where investors are snapping up relatively inexpensive single-family homes. 

As investors buy sites to develop single-family rentals, homebuilders would be forced to compete, potentially paying more for entitled land. That cost most likely would be passed along to buyers.

What’s more, investors are already competing directly with traditional homebuyers, which may worsen the prospect of homeownership for those entering the job market or millennials unable to exit the rental market. 

“Large investors buying single-family homes is a significant threat to the average homebuyer since the average homebuyer cannot compete,” said Carmen Hill, a Los Angeles-area residential real estate broker and professor of real estate investments at Cerritos College.

Other investors pursuing land acquisitions in anticipation of continued demand for single-family properties, for sale or otherwise, include alternative investment firm Värde Partners, which has entered into a land banking facility agreement with Taylor Morrison Home Corp., the nation’s fifth-largest homebuilder.

“The significant growth in demand for suburban housing has exposed a persistent shortfall in supply, creating substantial opportunities to invest,” Värde Partners Managing Director Brendan Bosman said. 

Though Taylor Morrison mostly develops properties for sale to individual buyers, it has been exploring single-family rentals since before the pandemic. In 2019, the Scottsdale, Arizona-based homebuilder formed a partnership with Christopher Todd Communities to build single-family rental communities.

Other major players in the single-family rental space, such as Pretium Partners, are also expanding their reach. 

Pretium’s rental property management operation, Progress Residential, owned about 66,000 single-family homes in 29 markets as of the end of Q2 2021, with an occupancy rate of nearly 97%, according to the company.

In January, Pretium formed a $700M joint venture with Canada’s Public Sector Pension Investment Board to develop SFR housing in the U.S. In September, Pretium formed another joint venture with Crescent Communities to develop $1B in new single-family build-to-rent communities. The first community will be in the Charleston, South Carolina, market, and others will follow in the Southeast and Southwest.

The partnership plans to develop more than 3,000 new rental homes altogether, according to Crescent Communities Managing Director, Single-Family Build-to-Rent Tony Chen.

“There is significant opportunity in the SFR market and a clear sense of urgency among institutional investors to deploy capital to this asset class,” Pretium Chairman and CEO Don Mullen said in a statement early this year.