At the Forefront of Build-to-Rent: Insights from IMN Nashville
The Build-to-Rent (BTR) space continues to evolve at a rapid pace and if there was one clear takeaway from the recent IMN Build-to-Rent Spring Forum in Nashville, it’s this: adaptability is no longer optional, and flexibility is becoming the defining advantage.
Across panels and conversations, developers, builders, and capital providers all echoed a similar theme; market conditions are shifting, and success increasingly depends on how well you can pivot.
Allison Whelton, SVP of Institutional Originations at Anchor Loans brought a grounded, experience-driven perspective to how lenders and operators should be thinking about risk, strategy, and long-term viability in today’s environment.
The New Reality: Underwriting for Multiple Outcomes
Historically, many projects entered the pipeline with a single, clearly defined exit strategy - either build-to-rent or build-to-sell. But as market dynamics have become less predictable, that approach is starting to feel outdated. A key theme Allison emphasized was the importance of building flexibility into the deal from day one.
At Anchor, that’s showing up in a meaningful way: a dual (or “double”) underwrite of the exit strategy.
Instead of evaluating a project through just one lens, Anchor is now underwriting deals with both potential outcomes in mind:
- Exit as a rental (BTR hold)
- Exit as a for-sale (build-to-sell) strategy
This approach isn’t just conservative - it’s strategic.
It gives builders and developers:
- A clearer understanding of downside protection
- The ability to pivot based on market conditions
- More confidence when moving forward in uncertain environments
Why This Matters for Builders and Developers
For operators in the field, this shift reflects what many are already experiencing firsthand.
Demand signals are no longer as straightforward as they once were. In some markets, rental demand remains strong, but absorption timelines and rent growth may vary. In others, for-sale inventory is tightening again, creating new opportunities.
By underwriting both paths, projects are no longer locked into a single outcome.
That flexibility can mean:
- Selling homes individually if retail demand strengthens
- Holding and stabilizing as rentals if capital markets shift
- Adjusting timelines without fundamentally breaking the deal
Looking Ahead
If there’s one takeaway from Nashville, it’s that the BTR space is evolving due to many factors including new regulations and government oversight, and with that maturity comes a need for more sophisticated strategies.
The days of one-dimensional underwriting are fading. In their place, we’re seeing a more nuanced, flexible approach that better reflects how deals actually perform in the real world. And for builders, developers, and brokers navigating today’s market, that shift could make all the difference.
Key Questions Builders Are Asking Right Now
As the market continues to evolve, the conversation is shifting from fixed strategies to flexible execution. Here are the key questions we’re hearing from builders, developers, and capital partners navigating today’s environment.
What Builders Are Asking Right Now?
As the market continues to evolve, the conversation is shifting from fixed strategies to flexible execution. Here are the key questions we’re hearing from builders, developers, and capital partners navigating today’s environment.
How are institutional builders underwriting BTR deals differently in today’s market?
Leading builders are increasingly underwriting for multiple exit scenarios—evaluating both build-to-rent and build-to-sell outcomes upfront. This “dual underwriting” approach reflects growing market volatility and the need to preserve optionality throughout the lifecycle of a deal.
What market conditions are driving the shift toward dual exit strategies?
Uncertainty in rent growth, absorption timelines, and capital markets is making single-outcome underwriting less reliable. At the same time, tightening for-sale inventory in certain markets is reopening sell-out opportunities, reinforcing the need for flexibility.
How does dual underwriting change the risk profile of a deal?
It shifts risk from being outcome-dependent to execution-dependent. Instead of relying on one path to perform, developers gain the ability to adapt in real time—improving resilience across different market scenarios.
What does real flexibility look like at the project level?
It means structuring deals so they can pivot without disruption—whether that’s selling homes individually, holding as rentals, or adjusting timelines based on demand—without fundamentally breaking the deal.
When does a dual exit strategy create the most value?
Dual strategies are most valuable in markets with mixed or shifting demand signals—where both rental and for-sale outcomes are viable, but timing, pricing, and absorption remain uncertain.
How are lenders evolving alongside builders in BTR?
Lenders are increasingly underwriting deals with multiple exit scenarios in mind, aligning more closely with how projects actually perform and giving developers more strategic flexibility from day one.
What are builders getting wrong about flexibility in today’s market?
Many still treat flexibility as a backup plan rather than a core part of the strategy. In reality, the most successful projects are designed from the outset to support multiple outcomes—not retrofitted when conditions change.
Is optionality becoming more valuable than optimization?
In uncertain markets, yes. Optimizing for a single exit can maximize returns in stable conditions—but optionality protects returns when conditions shift. The best operators are prioritizing resilience alongside upside.
