JP Morgan Asset Management and Georgia Capital are creating a new build-to-rent company called Laseter to leverage their institutional strength in the burgeoning Southeast market.
"This new venture is another nod to the need for additional housing options in the US and a creative way to combine home building and capital to address that need," said Tim Sullivan, chief advisory officer at Zonda. "Additional built-to-rent homes are ideally targeted as the 'missing middle' for attainable monthly payments and offer a great runway going forward to meet housing demand."
The companies say Laseter will “collaborate with outside partners to complete its developments and provide third-party general contracting services to other BTR developers.”
“The initiative underscores our strategic focus on the BTR asset class and reinforces our commitment to this high-conviction sector,” said Chad Treway, head of real estate Americas at JP Morgan Asset Management. “Demographic shifts and job growth in the Sunbelt are driving increased demand for single-family housing. With Millennials seeking more space and housing prices at record highs, many are turning to rentals, fueling the growth of this sector.”
Whit Marshall will serve as founder and CEO.
“We are big believers in the need for housing alternatives in this country,” he said. “The institutional world and the production homebuilding world are very different. We believe that the combination of our land development and production homebuilding expertise with JP Morgan’s scale and investing perspective positions us to be at the forefront of this unique opportunity in the early stages of this new real estate sector.”
The first two developments are in Nashville (165 homes) and Atlanta (126 homes).
Georgia Capital entered the BTR space in 2020 through its building company, Paran Homes. Since then, it has built 10 BTR developments and executed three forward sale transactions. The companies have also built more than 3,000 single-family homes and developed, sold, or financed more than 6,000 residential lots since 2010.
JP Morgan, meanwhile, owns a single-family rental portfolio worth nearly $2 billion across 65 communities with 6,000 homes on behalf of institutional investors.
While the build-to-rent (BTR) market has experienced a softening recently as the higher cost of capital has discouraged deals, the general state of the market is “good and getting better,” according to Callum Parrott, president and head of single-family rental (SFR) and BTR for Mill Creek Residential.
On the supply side, rate cuts from the Fed should lower the cost of capital, enable more deals, and encourage more investor activity. Such tailwinds should boost development and starts, which have been softer in 2023 and 2024. On the demand side, consumer affordability concerns and a product that caters to the lifestyle preferences of the demographic targets should allow the BTR sector to continue to capture demand for renters, both by choice and by financial necessity. Emerging trends, such as the rise of density-focused townhomes and attached product as well as technology in property management, will differentiate the BTR market and create a pathway for innovation in the sector.
