The latest project to offer evidence of the Inland Empire’s accelerating housing market calls for 163 townhomes to be developed as rentals in southwest Riverside County.
Sancerra Communities is partnering with STG Capital Partners and recently bought 26 acres for the proposed development. The Hoffman Company, which brokered the transaction, announced the land deal and planned project on Wednesday.
The townhomes are slated to go up at Palomar Street and Jefferson Avenue in the city of Wildomar. Wildomar is located about 12 miles northwest of Temecula and about 75 miles southeast of Downtown L.A.
In a release, a Sancerra principal highlighted both the area’s rising rents and increasing population.
“The Southwest Riverside County/Temecula submarket is attractive from an investment standpoint,” said Marcus Cook, Sancerra’s managing partner. Cook noted that that particular submarket had seen near 20 percent year-over-year rent growth, a low vacancy rate and “one of the fastest-growing populations in the Inland Empire.”
Construction is scheduled to begin toward the end of 2022, according to a release, with the community’s first homes ready in 2024.
The townhomes will range from 1,417 to 1,698 square-feet, with the larger floor plans calling for three bedrooms and two and a half bathrooms.
The “build-for-rent” plan is the latest example of an increasingly popular development option often intended to target more middle-income renters who are at least momentarily precluded from buying homes in California’s soaring housing market. The project’s marketing reflects those circumstances, with promotions touting it as “a community designed for young and maturing family renters.”
Sancerra is based in Newport Beach and bills itself as a company that “provides socially responsible, collaborative real estate asset solutions for property owners and communities undergoing periods of transformation”; the firm also has four similar projects underway.
Across the country, the build-for-rent development trend started booming in 2020, as more and more potential homeowners were priced out by a soaring market, and analysts predict it will become an increasingly large share of the housing market.
During the pandemic Riverside and San Bernardino Counties, which together form the Inland Empire market, have seen more incoming residents than just about anywhere in the country, as thousands of Californians have fled increasingly unaffordable coastal cities. And rents — though still cheaper than those in much of Southern California — have been rising apace. For the first quarter of 2021, the region saw a $130 monthly increase compared to a year earlier, representing the largest percentage rent hike in the country.