One of the first major home builders to venture into the single-family build-to-rent space three years ago is introducing its own BTR brand, effectively adding renters to its customer line-up.
Yardly, Taylor Morrison‘s cottage-style houses for rent, is aimed at consumers who can’t afford to own or prefer not to. According to trade publication Builderthe Scottsdale-based company is the nation’s fifth largest home builder, with nearly 13,700 closings so far this year.
“There is so much to be excited about in the emerging build-to-rent space, but above it all is the opportunity to serve more consumers—at each stage of life,” said Chairman and CEO Sheryl Palmer.
The announcement comes as the firm is ending its licensing agreement with Christopher Todd Communities. Under that pact, it built most of the Christopher Todd properties.
Taylor Morrison is fully committed to the continuation of its build-to-rent business under its new brand name, the company said in a statement. All future Taylor Morrison build-to-rent communities will be branded under the Yardly name.
Toward that end, the company is currently searching for appropriate sites in nearly half of its operating markets, including: Phoenix, Dallas, Austin, Houston, Orlando, Tampa, Sarasota, Jacksonville, Charlotte and Raleigh. In total, the home builder is actively involved in developing approximately 15 projects in its collective markets with many other communities under review.
The deep dive into the BTR sector boosts Taylor Morrision’s ability to capture a wider share of the housing market. And in so doing, it is a rare opportunity to introduce renters to the company’s for-sale product should they ever decide to take the next step into home ownership.
“Increased brand awareness can translate to brand affinity as customers convert from Yardly renters to Talor Morrison home owners and even back to Yardly again as their lifestyles or preferences evolve,” explained Darin Rowe, who heads the company’s build-to-rent division.
Yardley properties will “typically” consist of single-story, one and two-bedroom houses ranging from about 700 to 1,100 square feet. They will offer low-maintenance living, smart-home technology and professional management. Each unit will include private rear yards, which the company said served as the inspiration for the new brand name.
As for the Todd firm, also based in Scottsdale, company spokesperson Martha Moyer Wagoner said that “with the help from new partners,” it plans to bring its award-winning community concepts to new markets.
“Both companies are moving forward with plans that support their business objectives,” Wagoner said in an e-mail to MHN. “The robust growth in this sector has more investors and builders who are seeking experienced development partners. We see this as an important accelerator to our expansion plans.”
Under its partnership with Taylor Morrison, Christopher Todd Communities provided design details and asset management consulting, among other things, while the builder provided the land and acted as the developer. Todd communities in North Carolina, Texas and Florida are all owned by Taylor Morrison, as are three in the Phoenix metro area.
Todd currently has one wholly-owned property under development in the Phoenix market.
Meanwhile, National Association of Home Builders chief economist Robert Dietz expects the small and recently stalled single-family BTR sector to begin growing again in the new year. “The market will expand in the quarters ahead.” he said.
“As more households seek lower density neighborhoods and single-family residences, a growing number will do so from the perspective of renting,” the economist said. “This will be particularly true as mortgage interest rates remain elevated and increase.”
Dietz expects the sector to expand again after a flat third quarter when new construction leveled off to about 16,000 units. That’s 6 percent lower than the third quarter of 2021. But over the previous four quarters, BTR starts totaled 68,000, a 42 percent increase compared to the 48,000 starts in the prior year-over-year period.