Darin Rowe, president of Yardly For-Rent Brand
Courtesy Yardly Darin Rowe, president of Yardly For-Rent Brand

Two years after launching Yardly, Taylor Morrison's build-to-rent brand is making waves in the housing industry. Combining private backyard living with the flexibility of renting, Yardly has carved out a unique niche in the competitive rental market. With nearly three dozen project sites underway, key lessons learned, and ambitious plans for 2025, the brand is poised to redefine what renters can expect from their housing experience.

Ahead of his appearance at Zonda's Build-to-Rent event, BUILDER spoke with Yardly president Darin Rowe to dive into Yardly's journey, market strategies, and vision for the future. Read some of his introductory insights below and hear more from him in person in Arlington, Texas, on Feb. 3.

It’s been a little over two years since the launch of Yardly. Where does the built-to-rent brand stand today?

Five years ago, Taylor Morrison added this new and dynamic build-to-rent segment to its overall builder strategy including the last two years with our associated brand Yardly, whose name is a tip-of-the-cap to the private backyard that comes with each Yardly home; a key differentiator from traditional apartment living. Yardly helps Taylor Morrison fill a need serving consumers along their near and long-term housing journey. Almost three dozen project sites are owned with a majority of those ranging from having broken ground to actively being leased. In Q4 of last year, we sold our first two stabilized Yardly communities. If 2024 overall was the year of increased vertical construction at our Yardly neighborhoods then 2025 will be the year of lease-up activity, although we continue to source new land for future rental projects.

What markets do you have projects in? Which are doing the best and which are you eyeing for expansion?

To date, Yardly has targeted select markets where Taylor Morrison has for-sale home building operations. Aligning rental and for-sale housing operations allows Yardly to leverage the best of Taylor Morrison as it relates to land sourcing, trade relationships, and other synergies that give Yardly a competitive advantage in this real estate space. Active Yardly markets include Sunbelt geographies Phoenix, Dallas, Houston, Austin, Tampa, Sarasota, Orlando, Charlotte, and Raleigh. Each market has its own characteristics and we will naturally gravitate towards those where we experience the highest company returns with diversity across multiple markets, helping to smooth any specific single-market swings.

What has been your most successful strategy for maintaining competitive advantage in an increasingly crowded market?

A proven brand reputation matters. Yardly is proud to be strategically aligned with parent company Taylor Morrison’s legacy of quality construction and priority of loving the customer, including recent recognition as America’s Most Trusted Home Builder for a 10th consecutive year by Lifestory Research. Most of the “me too” BTR entities that surfaced three to four years ago have moved on, leaving those like Yardly, with a long-term commitment to real estate development and experienced industry professionals helping to improve an undersupplied national landscape. A reputation for “doing what you say,” including when acquiring land, partnering with trades, or keeping promises with customers, sets leaders apart from all others.

What lessons have you learned about achieving absorption targets in today’s market, and how do you navigate slower lease-ups?

“Rinse and repeat” consistency in sourcing, construction, and leasing is great in concept but a more challenged reality. Each market, micro-market, and street corner location is unique and requires creative expertise to manage absorptions that help maximize returns for each community. Understanding who your target consumer is, demographically, helps steer local marketing and overall execution. Getting reps within a multitude of municipalities across several states allows us to better educate industry partners and city staff to lessen pain points associated with zoning, entitlements, and vertical construction which precede the lease-up phase. Ultimately, each community is tactically managed on a weekly basis via lean-ins from corporate and field teams to effect the best leasing outcomes while considering the elasticity of rents and surrounding competitive influences.

How is changing renter demand influencing the design and amenities of your BTR developments?

The consumer demand equation is ever-changing based on macro- and market-specific factors including jobs, immigration, state legislation, weather events, and yes pandemics. There’s a search for balance by developers to give renters the product and related home features they want while at the same time achieving acceptable financial metrics considering site plan density, input costs, efficiencies that save time and understanding what renters will pay for. The impact from evolving amenity offerings such as pools, fitness, pickleball, and gathering spaces is more nuanced and somewhat less impactful overall.

With the sector’s rapid expansion, what challenges are you facing in maintaining operational efficiency and delivering consistent renter experiences?

BTR segment expansion may feel rapid in some respects, but the numbers confirm its infancy in most geographic markets. BTR generally comprises 10% to 20% or less of new multifamily starts, depending on market and a mere 1% of existing national multifamily inventory. More saturated BTR markets Phoenix and Dallas tend to understand the product yet want diversification for residents. Markets with little of the same require more education regarding the product and its impact on local jurisdictions but afford developers like Yardly less immediate competition. Operational efficiency is critical and achieved with consistency across markets, where available, and a mix of centralized service oversight and local market execution. The near-term spike in new multifamily projects has temporarily dampened rent growth, and higher operating expenses directly correlate with inflated everyday costs for consumers. These headwinds require efficiencies such as a consistent renter experience with a product offering that consumers want, good communication throughout the project life-cycle, and local project experts who are creative problem solvers. These experts include front line leasing agents who welcome prospects in, are knowledgeable about how their specific build-to-rent community make renters’ lives better, and are dedicated to loving the customer.