The Mandate
An institutional BTR developer with a 1,800-home operating portfolio across the Sunbelt engaged Feasibility Study Consultant to prepare a third-party feasibility study supporting a Conventional financing request for a project located in Maricopa County, Arizona. Total project capitalization fell within the $50M-$100M band. The capital provider, a national bank construction lender with permanent take-out commitment, required documentation consistent with current program review standards. The analytical question put to the team: Could Phoenix MSA single-family rental demand absorb 184 detached BTR homes against 2,340 competitive units in active lease-up.
Engagement Scope
- Primary market area defined as a 7-mile radius
- Comparable supply set of 16 properties
- Demand model framework: single-family renter-household formation and capture build
- Financial projection horizon: 10 years
- Site inspection completed; operator interviews where applicable
- Primary data collection through field reconnaissance and third-party market data
Methodology Applied
Primary Market Area
The PMA was defined as a 7-mile radius from the subject site, calibrated to the demand catchment behavior typical of build-to-rent assets in Arizona. The boundary captured the population, employment, and competitive supply base relevant to the subject's operating thesis.
Supply and Demand Reconciliation
The comparable supply set comprised 16 properties operating within the PMA or in directly substitutable submarkets. Demand was modeled using a single-family renter-household formation and capture build approach over a 10 years horizon. The reconciliation tested whether incremental supply, including the subject, could be absorbed within the projection window without compromising stabilized occupancy assumptions.
Capture Rate Calibration
The subject's capture rate was calibrated against the absorption capacity of the PMA. The analysis concluded that PMA absorption capacity exceeded subject build-out by a factor of 1.7 across the projection window, with a stabilized capture rate of 7.2%.
Exhibit 1: Comparable Supply Set, Arizona PMA
[Table or chart rendered in delivered report.]
Exhibit 2: Demand Projection Summary, 10 years Horizon
[Table or chart rendered in delivered report.]
Exhibit 3: Subject Capture Rate vs. PMA Absorption Capacity
[Table or chart rendered in delivered report.]
Analytical Conclusions
- Maricopa County added 14,800 single-family renter households over the trailing 36 months.
- Comparable detached BTR communities achieved 14 to 19 leases per month at 93% to 96% stabilized occupancy.
- Subject achieved a 16-month absorption to 92% occupancy with effective rents at the comp set median.
- Stabilized debt yield of 8.1% cleared the lender's 7.5% review minimum.
Deliverable
The delivered report ran 172 pages with 41 exhibits distributed across nine analytical sections, plus appendices documenting comparable supply data, demographic inputs, and financial projection assumptions. The document was prepared to the documentation standards of the national bank construction lender with permanent take-out commitment. The corresponding Conventional review framework guided exhibit selection and supporting documentation.