Single-family homes known as 'horizontal apartments' popping up
They aren't single-family homes for sale. They aren't condos sharing common walls. They aren't multi-story apartments with tenants above or below you.
Sep 12, 2022By Sheldon Zoldan, Ft. Meyers Florida Weekly
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They are something new to Southwest Florida, communities of single-family homes, sometimes called horizontal apartments, for rent only. The first one, The Odyssey by Soltura, opened July 1 with 129 units on Forum Boulevard east of Interstate 75. It's not going to be the last.
"We are early in the development cycle, said Soltura co-founder Danville Leadbetter. "We are not alone in this."
There are at least three other developers building or with plans to build rental home communities in Lee County.
Single-family rental apartments have been edging toward Southwest Florida for a decade.
The idea got started almost by accident. A group of entrepreneurs built some single- family apartments in Tucson, Arizona, around 2008, during the real estate bust.
They thought they would attract mostly people who had bad credit. They were wrong. The people wanting to rent had great credit, they just didn't want to buy a house. An idea was born.
The group formed NexMetro in 2012, a builder focused on single-family rental communities. It has 42 communities completed, under construction or in development scattered across the Phoenix, Arizona suburbs, in Colorado, Texas and now in Tampa, said Jacque Petroulakis, executive vice president of marketing and investor relations for NexMetro.
A friend of Soltura's Leadbetter living in Frisco, Texas, turned him on to the idea. Mr. Leadbetter checked out a NexMetro community in Texas and liked it. He and his business partner Arron Simon decided to try it in Fort Myers. Halstatt Real Estate Partners in Naples provided the equity funding.
Halstatt pivoted to single-family rentals in 2019, said Steve Iannaccone, principal owner. It has invested in four projects in Florida, one in Texas and one in Ohio.
The story is similar for Peter Olesiewicz, principal at Marquesa Capital Partners. He's building the Villas of Gulf Coast off Alico Road. He saw single-family rentals as something different.
"There was nothing in the state in 2019," he said.
Why would anyone who can afford to pay from $1,200 to more than $3,000 a month to rent a home not buy one instead?
"The demand drivers are very diverse," Petroulakis said.
"It's a large demographic," Leadbetter said.
Some, often baby boomers, don't want to be burdened with the responsibility of owning a home. The Wall Street Journal in 2019 analyzed census information and found 19% of people with six-figure incomes rented, compared to 12% in 2006.
Some are renters who just moved to the area and don't know where they want to buy or build a house, so they take a year to explore.
Some are single professional millennials who aren't ready to buy a home and others are going through life-changing transitions, like a divorce or death of a spouse.
Some have no choice. Many young families can't afford to buy because they are still paying off student loans, they don't have the money for a down payment and now mortgage rates are increasing.
The U.S. Census Bureau last year reported that only 37.8% of adults under 35, own a home.
"It's a solution for would-be homeowners who are priced out of the market," Mr. Iannaccone said.
Single-family home communities are designed as rentals and shouldn't be confused with a single-family home neighborhoods where investors swoop in, buy several homes and rent them.
Most single-family home rental communities have similar footprints. The homes are unattached except for the one-bedrooms, which share one wall. They don't have people above or below them. They don't share hallways or entrances and they have more outside space.
Developers build about 12 single-family rental units per acre compared to five per acre for a regular single-family community and 20 or more for a multi-story apartment.
The homes usually range from 750 to 1,250 square feet. They have 10-foot high ceilings, high-end kitchen counters, 8-foot doors, plenty of windows and top-of-the-line appliances, items you would find in any upscale non-rental home.
"It feels like your own tiny home," said Alexis Strafuss, 24, who lives at NexMetro's Avilla at Suncoast near Tampa. "It feels so elegant."
She said it is much better than the townhouse and apartment she rented.
She grew up in a 6,000-square-foot home but said her 750-square-foot abode doesn't feel much different. The biggest difference is "it's just me with the same luxuries."
The builders love to emphasize the small backyards where people can let their dogs out. That was important to Ms. Strafuss, who has two dogs.
"The backyard is not huge, but it's perfect to let the dogs out at 10 at night," she said.
The backyard was a magnet for Joe Altepeter, a doctor who recently moved into the Odyssey on Forum Boulevard. He said he's been living in apartments for the past four or five years in Indianapolis and Naples.
The backyard is a timesaver for him. He can let his Dalmatian out in the yard instead of having to walk her all the time.
He said the rent for his one-bedroom is about the same as he was paying in Naples, but the quality is better.
Ms. Strayfuss found that her rent was a little higher than a regular apartment, but she said you get more for the money.
Mr. Olesiewicz said the cost to build the single-family rentals are more expensive than building a multi-story apartment, but "you hope to get a little more in rent."
Mr. Leadbetter said Odyssey's rents are 10 to 15% higher than most of the local highest-rent luxury multi-story apartments.
According to the Odyssey website, a 750-square foot one-bedroom rental starts at $2,069 a month; a two-bedroom, two-bath, 1,031, square-foot rental starts at $2,594 and a three-bedroom, two-bath 1,235 square-foot rental starts at $3,199 a month.
About half of the 129 units are finished. Mr. Leadbetter said he's been adding five to seven renters a week. The grand opening is set for 5 p.m. Sept. 15.
"You have to market the rentals at the property level." he said. "You have to get people there. You need to show people what it is."
Renters won't need to be educated for long. The communities are sprouting up all over Florida.
The number of built-to-rent homes increased 30% across the country from 2019 to 2020, according to The New York Times.
Solura's 625 units were about 10% of the 6,000 units developed last year in the U.S., Mr. Leadbetter said. This year the number is 14,000 units nationwide.
Mr. Olesiewicz said there are now about 30 to 40 communities being built or planned in Florida. Besides its Alico Road development, Marquesa has a parcel in Venice, another in Pasco County and is working on a few others.
NexMetro has more projects scheduled for the Tampa and Orlando area.
"We've long identified Central Florida as a great opportunity," Petroulakis said.
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