Why Build For Rent?

Residential Real Estate will likely be the best asset class of the decade​


Home Price vs. Wage Growth

Home prices have significantly outpaced wage growth, pricing many buyers out of the market, lowering home ownership rates

Source: Federal Reserve Bank of St. Louis.


Home Supply

Single-family for sale construction has not satisfied demand, creating a shortage in the for-sale market​

Source: Federal Reserve Bank of St. Louis. Housing Starts represented by New Privately Owned Housing Units Started (seasonally adjusted). Monthly Supply represents the ratio of houses for sale to houses sold. This statistic provides an indication of the size of the for-sale inventory in relation to the number of houses currently being sold.


Share of Single-Family Renters by Age

As millennials age out of apartments and baby boomers become empty nesters, single-family rental will be poised for accelerated growth.

Source: U.S. Census Bureau, American Homes for Rent Research.


Makeup of SFR Owners by Portfolio Size

LEO believes that through superior institutional quality property and asset management, LEO at Flint Crossing can be a winner in the highly disjointed SFR market​

Source: American Community Survey; ATTOM Data Solutions; RCLCO.



Stocks are fundamentally expensive. Price to earnings ratios are strongly correlated to future returns and high multiples today forecast lower returns over the next ten years.

Source: S&P Global, Robert Shiller


Real yield on the US 10Y bond

The real yield on the US 10Y bond is (5.9)% as of February 2022. At this rate, an investment would lose over 20% to inflation over the next 5 years.

Source: Federal Reserve, Bureau of Labor Statistics. Real yield is the nominal yield minus CPI inflation.


Spikes in government debt

Following spikes in government debt, central banks will keep real rates negative to help governments deleverage. Real rates are likely to be negative for most of this decade, hurting holders of low-yielding fixed-income securities.

Source: Federal Reserve, Bureau of Labor Statistics, Treasury Direct


Institutional investors

Institutional investors are rapidly increasing their allocation to alternative assets in order to find positive real yields, but residential real estate is the only asset class large enough to accommodate the inflow.

Source: Savills Research​

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