Newmark Formally Starts Its Single-Family Rental Group

Newmark announced that it has finally formalized its single-family rental group, which will focus on investment sales, programmatic joint-venture equity placement and debt and structured finance, according to a press release.

With Newmark’s significant presence in the multifamily and alternative real estate sectors, and a growing institutional interest in the SFR space, formalizing this practice was a logical next step as we continue to enhance our full-service capital markets offerings to our clients,” the release quoted vice chairman Chad Lavender who, with vice chairman Ryan Maconachy, is leading the new group which will be part of Newmark’s multifamily capital markets group.

“With increased rental housing demand, renters are seeking more space and the privacy of a detached home without the demands of a mortgage, especially considering interest rate increases. This, in combination with the rise in SFR-earmarked capital, underscores the expectation that SFR supply will increase in coming years,” said director Leland Manning, who will work in the group.

The company has long been a powerhouse in multifamily, so it might seem odd that it has come to SFR this recently. A 2021 interview with Newmark Vice Chairman and Head of Multifamily Investment Blake Okland pointed to some factors that might have kept them from moving quicker.

He pointed to a growing relationship between single-family rental housing and apartment product, and it is something that new entrants into the single-family rental market should track. “The real dislocation in single-family rental housing is the same problem that has happened in multifamily housing,” he told GlobeSt.com at the time. “There was intense development in specific submarkets at the higher end of the quality spectrum and cost spectrum in multifamily, and now that is happening in single-family. There is not a lot of affordable stock, and it is very difficult to build.”

There have also been other practical considerations. “The single-family rental market is historically very scattered, so it is very hard to aggregate,” he said. That echoes remarks that Allan Swaringen, president and CEO of JLL Income Property Trust, made to GlobeSt.com in October 2021. “By our data as of the end of [2021], there were about 14 million homes that were renter-occupied single-family homes in the United States,” Swaringen said. “Of those 14 million homes, all institutional ownership is about 3%. It’s a market ripe for aggregation and consolidation. It’s been a fragmented market for decades but it’s becoming a little more institutionalized. The institutional investing is accelerating.” Technology enabled the growth of institutional investment, allowing both the marketing and operational aspects to be controlled in a single place.