Build-to-Rent & Multifamily: Investor Strategy Amidst Construction Constraints

By RadCRE Research · 2026-10-14 · Industry Insights

Higher borrowing costs are making new real estate harder to build, leading investors like Hines Global CIO David Steinbach to seek opportunities in existing properties and rental growth markets [1].

Investor Strategies Evolve Amidst High Borrowing Costs

The commercial real estate landscape is experiencing a strategic shift, particularly within residential sectors, as higher borrowing costs continue to impact affordability and new construction viability. Investors are increasingly looking for opportunities that prioritize income generation and benefit from constrained supply. David Steinbach, Global CIO for Hines, articulated this perspective in a recent interview, suggesting that investors should focus on acquiring existing properties and identifying markets where limited new construction can support rental growth [1]. This approach emphasizes evaluating fundamental market dynamics over mere initial interest rates, encouraging a deeper underwriting of investment opportunities [1].

This evolving investment thesis aligns with broader trends in the multifamily sector, which encompasses various housing types including build-to-rent communities. The discussion around multifamily housing indicates a persistent demand, even in complex markets like New York City, where public-private partnerships and incentives are seen as crucial to addressing housing shortages [5]. The appeal of rental income-generating assets is further underscored by the availability of specialized financing tools. Debt service coverage ratio (DSCR) loans, for example, allow private lenders to assess a property's income potential rather than relying primarily on the borrower's personal income, thereby facilitating the conversion of distressed housing into rental properties [3]. These loans enable investors to hold properties, collect rent, and build equity over time [3].

The Rise of Build-to-Rent Communities

The build-to-rent (BTR) segment continues to attract attention, representing a single-family-style living experience within a professionally managed community. A notable example is Skyline at Westfall Station, a 300-unit community in Clermont, Florida, completed in 2024 by Parkway and Silverpeak [6]. This development exemplifies the BTR model with its integrated direct-entry garages and spacious floorplans, averaging 1,082 square feet, with three-bedroom units extending up to 1,477 square feet [6].

Skyline at Westfall Station, comprising 19 two-story buildings across 23 acres, is strategically located in a submarket experiencing significant growth, anchored by AdventHealth Minneola’s $271 million hospital, which opened in December 2025 [6]. The area is also benefiting from the Olympus Project, a large sports campus projected to generate 2,800 jobs and $1.5 billion in economic impact, alongside four active infrastructure projects, including the SR-516 expressway [6]. Such developments highlight the importance of localized growth drivers and infrastructure improvements in enhancing the attractiveness and long-term viability of BTR assets.

RadCRE Perspective

"The current climate of elevated borrowing costs is undoubtedly challenging for new development. However, as David Steinbach of Hines points out, this environment also creates compelling opportunities for investors focused on fundamentals and income-generating assets. The build-to-rent sector, with its single-family appeal and professional management, is particularly well-positioned. When new construction is constrained, existing or recently completed, well-located rental properties—especially those benefiting from significant local economic drivers like the Olympus Project or AdventHealth Minneola in Clermont, Florida—become highly valuable. Furthermore, the increasing adoption of rental-income mortgages (DSCR loans) signifies a growing sophistication in financing strategies for residential investment properties, offering a critical pathway for deploying capital into rental housing. Investors must diligently underwrite these opportunities, focusing on market-specific supply-demand dynamics and long-term rental growth potential." — Majid Radaei, Founder & Principal Broker, RadCRE

Tags: build-to-rent, multifamily investment, CRE financing, rental income mortgages, distressed housing