- CRE Daily
- Posts
- Phoenix Tops Build-to-Rent Construction as Sun Belt Powers National Growth
Phoenix Tops Build-to-Rent Construction as Sun Belt Powers National Growth
The build-to-rent market is holding strong, with over 64,000 units currently under construction. Phoenix leads the charge, backed by continued momentum across the Sun Belt.
Jordan B.
June 24, 2025
Together with
Good morning. The build-to-rent market is holding strong, with over 64,000 units currently under construction. Phoenix leads the charge, backed by continued momentum across the Sun Belt.
Today’s issue is sponsored by OpticWise—learn how to control your data, boost NOI, and future-proof your assets.
🎙️ This week on No Cap podcast, Jack and Alex sit down with Tommy Lee, Global Head of Capital Markets at Trammell Crow Company, to break down what it really takes to make a deal pencil in today’s market.
Market Snapshot
|
| ||||
|
|
BTR Buzz
Phoenix Tops Build-to-Rent Construction as Sun Belt Powers National Growth
The desert metro is miles ahead as the US leader in build-to-rent (BTR) construction activity, with a growing pipeline and no signs of slowing.
By the numbers: As of early June, roughly 64,200 BTR units were under construction nationwide, with nearly 57% of that activity concentrated in the Sun Belt. The South is driving much of the momentum, outpacing other regions by a wide margin. The West follows at a distant second, while the Midwest and Northeast contribute a smaller share of the national pipeline, together accounting for less than 10% of projects underway.
Phoenix in the driver’s seat: Phoenix continues to be the epicenter of BTR development. Its dominance is evident given the South’s strong lead and the metro’s top billing. Trailing behind are Dallas (~5,500 units) and Houston (~4,470 units), followed by Austin, Atlanta, and Fort Worth.
Smaller markets, big moves: Notably, Myrtle Beach, SC—a relatively small market—has nearly 1,000 units under construction, surpassing some larger cities like Charlotte and Denver. Other significant markets with 900+ units underway include Nashville and Raleigh/Durham, signaling wide geographic interest in the BTR model.
Long-term demand remains strong: While overall BTR construction has tapered, more than 7,500 planned units are currently in development. This planned inventory adds to the sector’s long-term runway and reflects sustained interest in single-family rental alternatives.
➥ THE TAKEAWAY
Beyond major metros: The BTR sector may be moderating in pace, but its geographical footprint is expanding, with Phoenix blazing the trail and even smaller markets joining the BTR boom. Investors and developers should keep their eyes on the South, not just the big cities.
TOGETHER WITH OPTICWISE
The New Playbook for Commercial Real Estate
Peak Property Performance is more than a book—it’s a wake-up call for commercial real estate owners who are unknowingly leaving millions on the table.
Discover how AI, data, and digital infrastructure are reshaping NOI and why building owners must take control now. Control your data. Control your destiny.
*This is a paid advertisement. Please see the full disclosure at the bottom of the newsletter.
✍️ Editor’s Picks
The #1 downloaded guide by CRE transaction coordinators: Get the playbook back office pros rely on to streamline deal flow, eliminate spreadsheet chaos, and keep operations running smoothly. (sponsored)
Cement strategy: Amrize, Holcim’s North American spinoff, is going public with a projected $30B+ valuation, boosted by infrastructure demand and tariff-driven sourcing advantages.
Yield pressure: The Trump administration is weighing changes to bank reserve rules in a bid to push down stubbornly high 10-year Treasury yields.
BTR boomtown: Phoenix leads the nation in build-to-rent construction, with the Sun Belt dominating overall.
Forced relocations: Amazon is ordering thousands of employees to move closer to designated office hubs, just as CEO Andy Jassy signals AI will reduce headcount and reshape job roles.
Supply strain: Tariffs and inflation are squeezing construction margins, pushing firms to lock in pricing, diversify suppliers, and lean into tech and forecasting tools.
Broker fee fallout: NYC's new FARE Act is creating confusion, workarounds, and early legal questions in the rental market's first week under the rule.
🏘️ MULTIFAMILY
Unit tradeoff: Trammell Crow faces a choice at its Soho site: build fewer units to avoid 485x wage rules or wait on uncertain legislative reform.
Midwest momentum: Chicago's multifamily market is heating up as investors shift focus from oversupplied Sun Belt metros to the Midwest's rising rents and tighter supply.
Creative conversions: Adaptive reuse is gaining momentum as developers convert obsolete offices, hotels, and schools into housing.
Refi deal: Gotham Organization landed a $460M Wells Fargo refinancing for its Hell’s Kitchen property, backed by Fannie Mae.
1031 launch: Bluerock launched a $37.8M multifamily DST in Pinehurst, NC, aiming for cash flow and value-add upside for 1031 investors.
🏭 Industrial
Tariff turbulence: Southern California industrial leasing spiked to a four-year high in Q1, but activity slowed in April and May.
Bay buildout: Prologis acquired a 177K SF Fremont warehouse for $59M, continuing its Bay Area expansion.
Capital deployment: Blackstone lent $86M to Galvanize Climate Solutions for its $113M acquisition of a six-property, 768K SF light industrial portfolio.
Community resistance: Three major Virginia data center projects totaling 4.5M SF across 1,000 acres were rejected or recommended for denial last week as local opposition intensifies.
🏬 RETAIL
Grocery expansion: Nuveen has acquired a 600K SF grocery-anchored shopping center portfolio in Southern California.
Mag Mile retreat: MetLife is officially marketing the top five floors of Chicago’s Water Tower Place for sale as it moves to scale back the mall’s retail footprint from eight floors to three.
Retail venture: FrontRange and O’Connor Capital have launched a $150M joint venture to develop 12–15 triple-net leased retail properties across key East Coast markets.
🏢 OFFICE
Flex future: Coworking's next evolution hinges on tech standardization, broker integration, and enterprise-focused platforms to scale the industry.
Discount deal: JBG Smith acquired the Tysons Dulles Plaza campus for $42.3M, well below its previous $130M valuation.
Name game: As branding becomes a key differentiator, owners of high-profile towers are rethinking names to boost prestige, attract tenants, and better align with evolving building identities.
Nonprofit expansion: Regional Center of Orange County renewed and expanded to 102K SF at Santa Ana’s Tustin Centre, the largest Orange County office deal of 2025 to date.
Shared space: Industrious is expanding its footprint at Philadelphia’s Liberty Place, adding 23K SF to meet rising demand for flexible office space.
🏨 HOSPITALITY
Tourism chill: Canadian travelers are steering clear of US resort towns this summer, hitting hotel revenues hard.
Casino bet: Silverstein Properties has partnered with Hyatt to anchor its $1B West Side casino proposal ahead of the NYC license deadline.
A MESSAGE FROM LENDINGONE
Build-to-Rent Is Reshaping the Future of Multifamily Investing
Multifamily margins are under pressure—from aging assets and rising capex to tenant expectations that have outgrown the typical apartment experience.
In this free white paper, you’ll learn:
🔹 Why BTR rents often outperform traditional multifamily—with less tenant churn
🔹 How top multifamily operators like Greystar and MAA are scaling into the space
🔹 Where institutional capital is flowing—and what it signals for long-term demand
🔹 How LendingOne is helping developers finance and scale BTR communities
🔹 Real-world case studies from operators building the future of suburban rentals
*This is a paid advertisement. Please see the full disclosure at the bottom of the newsletter.
📈 CHART OF THE DAY
According to Nuveen, global real estate returns have been positive for the last four quarters.
You currently have 0 referrals, only 1 away from receiving Multifamily Stress Test Model.
What did you think of today's newsletter? |
Reply