Single-Family Rental REIT Update – July 2025

July 9, 2025

🔍 Navigating the Evolving SFR Landscape: Key Takeaways from Capright’s July 2025 REIT Update

As the Single-Family Rental (SFR) market continues to solidify its place as a core institutional asset class, the need for timely, accurate, and unbiased data has never been greater.

📈 Key Market Highlights:

• Net Operating Income (NOI) Growth Holds Steady:
Both Invitation Homes (INVH) and American Homes 4 Rent (AMH) reported mid-to-high 3% NOI growth—consistent with prior quarters and reflective of durable demand.

• $386M+ in New Activity:
INVH acquired 631 homes in a $213M deal and continues to scale its builder-partnered pipeline. Meanwhile, AMH delivered 545 new homes through development and JVs totaling $173M.

• Occupancy & Rent Growth Remain Strong:
Average occupancy held at an impressive 96.6%, and blended rent growth rebounded to 3.6%, led by renewal rates and longer tenant stays.

• Private Capital Continues to Flow:
NCREIF fund exposure rose to $7.1B across 238 assets—up from $4.3B a year ago—further validating institutional appetite for the sector.

⚠️ Special Feature: Rethinking AVM/BPO-Based Valuations

One of the most critical discussions in this update centers around the increasing reliance on automated valuation models (AVMs) and broker price opinions (BPOs) in SFR securitizations.

Our deep dive into Progress Residential’s 2025-SFR3 securitization reveals how overreliance on AVMs can distort loan-to-value ratios, misprice risk, and challenge investor confidence.

Key points include:

• AVMs often assume full retail pricing and instant liquidity, ignoring transaction friction and resale restrictions.

• A single mispriced BPO can ripple through an entire securitization pool—masking leverage and inflating valuations.

• A call for rating agencies and lenders to blend income-based approaches with DCF models and human oversight.

If you’re investing in, underwriting, or securitizing SFR portfolios, this is a must-read.

📬 Let’s Talk

We remain committed to delivering clarity, accuracy, and independence in a fast-moving market. If you’d like to discuss the findings or need support with your SFR portfolio valuation or strategy, reach out to: