Dive Brief:

• Commercial real estate owner Hines, through its flagship core-plus Hines U.S. Property Partners fund, made its first build-to-rent acquisition in the U.S. earlier this month, purchasing Blu South, a BTR  community under construction near Charlotte in Pineville, North Carolina, from Athens, Georgia-based Landmark Properties. 
• The Houston-based real estate firm targeted BTR because it believes “higher-for-longer rates” will tamp down home buying for people who prefer walkable, amenitized communities, according to a press release announcing the acquisition. 
• In addition, Hines thinks the BTR and single-family housing alternatives have matured as a sector, Hines Senior Managing Director Michael Harrison told Multifamily Dive. “As an asset class, renters by choice are an important and growing segment of the population, including those who would prefer to rent detached and attached single-family dwelling units,” he said “We see continued institutional growth and investment in the space and Hines intends to grow its presence in both the development and acquisition of BTR housing.”

Dive Insight:

Hines, which has holdings across real estate, including apartments, office, retail and industrial, is just the latest apartment company to expand in the BTR sector since the COVID-19 pandemic began, freeing many renters to work remotely and leave urban areas in search of more space.

In 2021, Charleston, South Carolina-based Greystar, the top multifamily owner, manager and developer in the U.S., and the Canada Pension Plan Investment Board formed a joint venture to develop and acquire purpose-built single-family rental communities in the United States. Since then, the firm has been active in a number of developments, including a 156-home project in the Sunterra master-planned community in Katy, Texas.

In 2021, Scottsdale, Arizona-based Alliance Residential, traditionally one of the top apartment builders in the U.S., established its Silveray brand to deliver lower-density, single-family purpose-built rental communities. 

On the student side, Landmark Properties moved into the BTR segment in 2022. REITs have also gotten into the act. In late 2022, Camden Property Trust entered the BTR fray, starting construction on two properties near Houston in the third quarter.

Targeting Charlotte

For Hines, the purchase of Blu South wasn’t just about expansion into BTR. It was also about growing in the Charlotte market. 

“It is one of our highest-priority target markets in the Southeast,” Harrison said. “Its continued presence as a major financial center, together with the business diversification that has occurred, makes Charlotte a great place to live and work.”

Once completed, Blu South will have 551 homes ranging from three- and four-bedroom townhomes to single-family detached houses and duplexes across 75-plus acres. A majority, 341 residences, have already been delivered, with the remainder expected to be fully produced by the third quarter of 2025.

The property’s amenities will include a 15,000-square-foot clubhouse with a fitness center, swimming pool, golf simulator, dog parks, a pet spa and pickleball and basketball courts. Its homes will have two-car garages with space for two additional vehicles. Blu South also provides walkable access to Charlotte’s light rail system, as well as convenient road access to Interstate 485.

After the purchase of Blu South, Hines will continue to see other BTR projects. “BTR is a high priority for Hines nationally, but in particular across the entire Sun Belt region, including at least a dozen Southeastern markets,” Harrison said. “We are also selectively evaluating BTR in other regions, as well.”

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