The single-family rental (SFR) industry has transformed itself from a distressed investment opportunity arising out of the subprime mortgage crisis to one of the most fundamentally sound real estate asset classes going into 2021. While this evolution has occurred in only 10 short years, it is fair to say the asset class is still in its infancy, with substantial room for growth. Initially, many of the most prominent institutional investors dipped their toes into the strategy with allocations to opportunistic fund vehicles that invested in individual homes in markets across the country. Today, these same investors are expanding their investments in the SFR space by participating in the industry’s next wave of growth, dedicated rental communities (DRCs). The evolution of the space, however, certainly did not occur in a straight line.

The evolution from distress to growth

The subprime mortgage crisis created a dislocation in the residential housing marke