Phoenix-based apartment developer P.B. Bell is entering the single-family rental market. Demand for single-family rentals has been growing, particularly in high-growth markets like Phoenix. Population and job growth have been biggest accelerants of demand, but the pandemic has also played a role in growth of this market.
“We are developers, and we manage and own apartments. We don’t currently have any ownership in single-family product, but we are in the process of doing so for a lot of different reasons,” Chapin Bell, CEO of P.B. Bell, tells GlobeSt.com. “We have seen very positive demand for single-family. If you are in the market looking for a single-family rental, it is relatively difficult to find because occupancy levels are so high. Millennials want the single-family experience with the benefit of a professionally managed and amenitized community.”
Today, people are also looking for larger homes that can accommodate remote working models, distance learning and social distancing. “There are COVID-related reasons. When you have a single-family product, it is easier to social distance than in an apartment property because you aren’t in elevators or hallways,” says Bell. “So, there is a benefit there.”
For these reasons, P.B. Bell has been motivated to enter this market. It plans to build professionally managed single-family rental communities with onsite amenities, similar to those in class-A apartments. “We have developed a strategy to develop this product type,” says Bell. “We have a property in escrow to build this product. Based on the strength and the demand, which we expect to continue, that we have seen in this market, we are planning to invest in this market.”
There is demand for these single-family rentals throughout the Greater Phoenix area, anywhere with job and population growth. “We are seeing the demand across the valley. Most of the cities in the Phoenix area have done a good job of growing the job base, including Mesa, Goodyear, Tempe,” says Bell. “The greater Phoenix area is benefiting from job growth and population growth. A lot of the submarkets in Phoenix that are attractive as a result of that.”
While the pandemic has helped to accelerate this trend, the single-family rental market was already on the radar of many investors, including institutional capital. “Before the pandemic, the market was strong because of job growth, population growth and affordability,” says Bell. “The single-family rental product was performing well, but since then, the demand has continued. The product type has benefitted from the pandemic, like social distancing.”