The Hoffman Company, a leader in the land brokerage industry based in Irvine, recently closed the sale of a 26-acre parcel of land envisioned for a new build-to-rent townhome community in Southwest Riverside County.
Developer Sancerra Communities, located in Newport Beach, Calif., and its partner, STG Capital Partners, plan to build a neighborhood of 163 townhomes nestled near the foothills of the Temescal Mountains. Located at the intersection of Palomar Street and Jefferson Avenue in the City of Wildomar, construction is scheduled to begin in the fourth quarter of 2022 with the first homes available for lease beginning in the second quarter of 2024.
“The Southwest Riverside County/Temecula submarket is extremely attractive from an investment standpoint. With year-over-year rent growth approaching 20%, vacancy rates hovering near 3% and one of the fastest-growing populations in the Inland Empire, the submarket has outperformed most markets across the country since the start of the pandemic,” said Marcus Cook, Managing Partner of Sancerra Communities. “We are particularly bullish on build-for-rent communities in supply-constrained markets like California.”
Build-for-rent communities – single-family homes built specifically as professionally managed rental communities – are a relatively recent trend in response to demographic shifts and the evolution of customer preferences. However, the high price tag of scarce land combined with a difficult entitlement process and arduous fees in California have proved challenging for developers.
“There is plenty of new investor demand for build-for-rent opportunities in California, but opportunities are scarce. The build-for-rent model has traditionally worked best where land is plentiful and cheap, and development costs are low,” said Justin Woodworth, Managing Director of Multifamily Markets for The Hoffman Company, who brokered the transaction. “There aren’t many developers like Sancerra that have figured out how to make it work in California.”
Sancerra appears to have found the right recipe for build-for-rent in California. With four similar projects already in the works in other markets across California and an appetite for continued growth, Sancerra has plans to invest an additional $500 million on similar properties over the next five years.
“California’s development process is overly complex and burdensome relative to most other parts of the country, and as a result, the state builds far fewer homes than are needed each year. Sancerra was formed to address the state’s housing shortage, and we are thankful for the opportunity to work with the City of Wildomar to bring this new housing alternative to its community,” said Cook.
This new community will offer three modern floorplans ranging from 1,417 to 1,698 square feet. Plan One features a dual master bedroom configuration with 2.5 baths and plans Two and Three will have three bedrooms and 2.5 baths. All homes will have a spacious walk-in closet in the master bedrooms, an attached two-car garage and a convenient upstairs laundry room with space for a full-size, side-by-side washer and dryer.
Community amenities are similarly designed to appeal to young and maturing families and include a pool, spa, cabanas, BBQ grills, dog park, tot lot and sports courts.
The City of Wildomar is centrally located along the I-15 transportation corridor, just 10 miles north of the City of Temecula and within an easy commute to the Riverside/Corona job centers to the north and the Carlsbad/Escondido job centers to the south.