Sallee’s Journey into Build-to-Rent

Sallee didn’t start as a Build To Rent company.

In fact, when our company was founded in 1989, build-to-rent (BTR) wasn’t an asset class anyone was talking about. Over the decades, we built our experience across single family residential construction, land development and real estate, adapting as the housing market and the needs of the people living in it continued to change.

That evolution eventually led us to build-to-rent.

Looking back, it wasn’t one single decision that brought us here. It was a series of opportunities, market shifts and lessons that showed us there was a better way to meet a growing need for housing while creating long term value for investors.

Recognizing a Shift in Housing

For decades, the traditional housing path was relatively straightforward. Rent an apartment, save for a down payment and eventually purchase a home.

Today, that path looks very different.

Home prices have risen significantly. Mortgage rates and other costs of ownership have made buying more difficult. At the same time, many renters have outgrown the traditional apartment experience, but that doesn’t necessarily mean they are ready or able to purchase a home.

We began seeing a growing gap in the market.

People still wanted the things traditionally associated with single family living. They wanted more space, multiple bedrooms, attached garages, outdoor areas and a neighborhood environment. But they also valued the flexibility and convenience of renting.

BTR offered a way to bring those two experiences together.

From Building Homes to Building Communities

Our background gave us a unique perspective on the opportunity. Sallee already understood how to identify land, navigate development, install infrastructure and construct homes. As we moved further into BTR, however, our thinking had to expand beyond the individual home.

A successful BTR project isn't simply a collection of rental units.

It is an investment.

That means thinking about how residents will actually live there. What floor plans make sense? What are the returns in an attached garage? What amenities will residents seek to help with occupation percentages? How does the community connect to nearby schools, employers, retail and transportation?

Every choice, from land basis and density to product mix and amenities, can ultimately affect construction costs, lease up, resident retention, operating performance and long term value.

That intersection between housing and investment is where we saw the real potential of BTR.

Learning and Evolving Along the Way

Our approach to BTR today has been shaped by what we've learned from developing, building and operating communities across the Kansas City region.

We've learned that there is no universal BTR formula.

Different locations call for different products. Some residents want two story townhomes with multiple bedrooms. Others are drawn to single level ranch style living. Some communities benefit from larger amenity packages, while others may place greater value on private outdoor space, garages or access to nearby conveniences.

We've also learned that the best decisions happen when the entire lifecycle of a project is considered from the beginning.

Development decisions affect construction. Construction decisions affect operations. Operations affect the resident experience. And all of those pieces ultimately affect investment performance. That realization has played an important role in Sallee's evolution into a vertically integrated real estate company.

Today, our perspective extends beyond simply delivering homes. We look at opportunities through development, construction, operations and capital with the goal of creating communities that produce long term value for our investment partners.

Where We Are Today

What started as another way to think about housing has become a significant part of Sallee's future.

Our BTR portfolio has grown across multiple communities and thousands of homes at various stages of development, construction and operation. Along the way, we've continued refining the product, studying what residents respond to and looking for ways to create greater efficiency and value throughout the development process.

But the basic idea that attracted us to BTR hasn't changed.

There is a growing group of people who want the space and lifestyle of a home without necessarily wanting or being able to purchase one. There are communities that need more diverse housing options. And there are investors looking for opportunities backed by real housing demand and tangible assets.

Build-to-rent sits at the intersection of all three.

Nearly four decades after Sallee began, our business looks different than it did in 1989. That's a good thing.

Real estate changes. Housing needs change. Capital markets change. Successful companies have to be willing to recognize those shifts and evolve with them. For Sallee, build-to-rent wasn't about chasing the newest real estate trend. It was a natural progression of what we've spent decades learning how to do: find opportunities, develop land, build homes and create value.