CoStar News Reflects on the Winners and Losers in an Unforgettable Year for Real Estate Talking to Key Players About Their Experiences.

William Astor was invited to share his thoughts:

“While 2020 has been a challenging year in many sectors, build to rent has held up well. Occupancy remains relatively high, particularly among well-paid professionals. The pandemic has also shone a light on the importance of the quality of the urban environment in our cities, and the quality of life that good living spaces provide when more people are working from home. One example of this is that we have seen a significant increase in renters looking for larger homes for sole use, taking two bedroom apartments so that they have the space for a home office, and we believe professionals will increasingly see their home, their building and their neighbourhood as a place to work as well as a place to live and socialise. Location, quality, flexibility and operations will therefore become even more important in build to rent development in 2021.

“Investor demand will continue to grow and we believe the sector will be an important contributor to the revival of city centres, as build-to-rent is not as cyclical as other residential development and increasingly brings with it the ground-floor community uses and experiences that keep urban areas alive.

“In the short-term we expect yields to compress and not widen for the best assets, as interest rates are likely to remain lower for longer, making residential investment even more attractive to institutional investors. But traditional forward-funding of development will become less attractive, as we see large institutional investors partner with the best developers and operators to deliver the quality of product that is needed to deliver returns in a competitive market. Investors will also pay more for the best assets, and will be increasingly mindful of the ESG credentials of their assets. We are already seeing platform aggregation and a consolidation of capital, as those larger institutional investors form partnerships with developers and operators, leaving little room for new entrants as the largest investors become tied up. At Long Harbour we have always sought to operate a vertically integrated model with embedded management and we believe even more so in the benefits of this approach as we head into 2021.”

Read CoStar's full year in review piece here: https://www.costar.com/article/1883361555/costar-review-the-year-the-real-estate-rule-book-was-torn-up