Amid the strong performance for homebuilding in 2020, the build-to-rent segment is playing an increased role.

“Build-to-rent — BTR — is no longer an emerging asset class — it’s here, and it’s here to stay,” says Chris Bley, co-president and CIO of IHP Capital Partners. But he notes build-to-rent covers a wide spectrum of product from luxury short-term rentals (such as VRBO) to traditional single-family homes. “It also includes small-lot cluster homes and what is now becoming known as ‘horizontal apartments.’ This end of the BTR spectrum is quite similar to traditional multifamily in terms of its economics and functionality,” adds Bley.

A number of homebuilders are embracing the build-to-rent concept by creating their own divisions specialized in this area or partnering with the established BTR investors, says Bley.

“IHP sees BTR as a winning asset class due to high level of demand, multiple exit options, and current income and return char