The Rent Roll with Jay Parsons
Episode 54: JPI Executive Leadership Team | Is Now The Time To Build Again?
Recorded live at Hotel Drover, Fort Worth Stockyards | Date: October 9, 2025
Episode Overview
Jay Parsons hosts a special, first-ever live audience edition of The Rent Roll, focusing on a critical question in today’s rental housing industry: Is now the time to build again? With high interest rates, elevated construction costs, and flat rents, the environment is challenging, especially for small developers. Jay examines how these pressures are shifting market dynamics in favor of larger developers and introduces his live panel: JPI’s executive leadership team. The discussion explores JPI’s strategy, expansion efforts, and push for innovation and efficiency in construction—arguably the slowest-to-evolve sector in real estate.
Key Discussion Points & Insights
1. Market Context: Are We at a Turning Point for Apartment Construction?
- Starts are Down, Market is Shifting
- Apartment starts are at their lowest since 2013 (~250,000 units annually, down from 600,000 at the 2022 peak).
- Completions peaked in 2024, are gradually declining, with a real slowdown anticipated from 2026 onward.
- Larger Developers Taking More Share
- Large developers are starting a higher share of projects as small/local builders retreat. (Top 25 developers started 32% of all new units in 2024, highest on record.)
- Why Build vs. Buy?
- Acquisitions, particularly of newer, well-located properties, remain tough due to limited inventory and high competition.
- New construction allows delivery into less competitive, higher-demand periods (2026–2028).
Notable Quote:
“Even for large developers, it’s hard, but for those groups who do one or two projects a year…it’s especially hard. They don’t have the efficiency of scale to squeeze enough juice out of the lemon to make deals pencil out in today’s environment.”
— Jay Parsons [00:42]
2. News Highlights Impacting Rental Housing (29:25–41:20)
- Pew Study: Modern multifamily apartments offer safety, environmental, and economic benefits.
- Rental Registries: Cities are implementing public rental registries, more burdensome for ‘mom & pop’ landlords than institutional operators.
- Accidental Landlords: Significant share of the SFR market is now held by small-scale “accidental” landlords, not institutions, which debunks some media narratives.
- Regulatory Risks in LA and DC:
- LA’s anti-investor sentiment, regulatory unpredictability, and rent strikes have scared off capital—now "redlined" by most large investors.
- DC’s TOPA reform gives new builds a 15-year exemption, but lingering exit risks remain, limiting true investor “swell” in interest.
Notable Quote:
“If you can’t execute a business plan, you can’t build housing.”
— Jay Parsons [25:53]
3. Interview: JPI Executive Team on Strategy & Execution
Participants:
- Peyton Mays (CEO)
- Molly Fadoul (CFO/CIO)
- Kylie Harvey (Chief Construction & Design Officer)
a. Ownership Stability & Long-Term Planning
[27:53] Peyton Mays:
- JPI’s 36-year track record, focus on Texas and SoCal post-GFC, and now supported by Sumitomo Forestry (330-year-old global partner), bringing long-term vision in a volatile market.
- Business is “built to scale”—critical for weathering current capital market storms.
Notable Quote:
“We’re not building for the next 12 months, we’re looking 10 years out.”
— Peyton Mays [28:38]
b. The Case for Building New vs. Buying Existing
[30:45] Peyton Mays:
- Despite some opportunity to buy below replacement cost, most quality assets are not trading, or owners are holding due to “bad time to sell.”
- Predictable supply pipeline (“one of the easiest things to forecast”) gives a clear window: start a project now, deliver into a supply-constrained future.
- Public-private partnerships (workforce, affordable) are a strategic focus; cities want “quality new housing.”
Notable Quote:
“If we can put a shovel in the ground today, we know it will be delivering at a time when there’s less competition.”
— Peyton Mays [31:23]
c. Efficiency & Innovation – The Big Company Advantage
[36:09] Peyton Mays:
- JPI leverages institutional memory, centralized planning, and scale to enter (or re-enter) new markets efficiently (e.g., bulk savings on materials, knowledge transfer, proven playbooks).
- Key hires from major companies and government (e.g., Paul Kipsgaard, Scott Turner) bring outside-industry operational expertise.
Notable Quote:
“If folks can see they’re part of an amazing team—world-class talent attracts talent.”
— Peyton Mays [38:41]
d. Industry Consolidation – Are Large Developers Taking Over?
[41:25] Molly Fadoul:
- Multifamily is poised for the same consolidation single-family saw post-GFC.
- Smaller developers, comprising 75–80% of starts, face capital, efficiency, and loan hurdles.
- Scale yields advantages in integrated design, GC functions, and capital access.
- JPI aspires to build large market share in targeted MSAs.
Notable Quote:
“There is an advantage to scale, particularly with an integrated business like JPI... We can still get projects built when return requirements remain the same and capital continues to be expensive.”
— Molly Fadoul [41:43]
e. Investor Trends & Strategic Market Selection
[45:28 & 48:14] Molly Fadoul:
- Investors want “direct to sponsor” deals, aim for efficient, programmatic relationships with large developers—meaning bigger projects, fewer partners.
- JPI selects markets through a rigorous, data-driven scoring system (40+ variables), focusing on demand, affordability, regulatory climate, and ability to build at scale.
- Current expansion into Seattle, Phoenix, North Carolina, Nashville, and Florida.
Notable Quote:
“We want to be building up and down the income spectrum… finding a structure to deliver more (housing) where affordable housing is such a challenge.”
— Molly Fadoul [51:40]
f. Driving Construction Efficiency Through Innovation
[53:24] Kylie Harvey:
- U.S. construction industry lags far behind others in efficiency/productivity; JPI adopts lean manufacturing, centralized support, and some trade integration.
- Lessons from oilfield transformation (via Paul Kipsgaard) inform process improvement.
- On first fully integrated project, saw “30% faster to first units”—massive time and cost savings.
Notable Quote:
“We want to do for construction what Henry Ford and Toyota did for manufacturing.”
— Kylie Harvey [53:39]
“On our very first fully supported deal, we’re already seeing the results—we are about 30% faster to first units.”
— Kylie Harvey [55:31]
g. Adoption of Field Technologies
[56:22] Kylie Harvey:
- Construction sites now use advanced BIM modeling, AR glasses, robotic layout tools (“Roomba” and “robotic dog” for QC).
- Models aren’t just for permit plans—they’re built for field use, supporting accuracy and error prevention.
- Early error detection prevents domino-effect cost overruns (e.g., misplaced plumbing lines costing "seven figures" to fix).
Notable Quote:
“We build our models to be used in the field…With that, you’ll see guys on our sites wearing augmented reality glasses, swiping at the air…”
— Kylie Harvey [56:28]
h. Tariffs, Supply Chains, and Immigration Policy
[60:25] Kylie Harvey:
- Tariffs have had little effect on recent projects, supply chain has “localized,” with most materials sourced within the U.S. now—“no single component is that large a piece of the whole.”
- Recent immigration policy changes have not affected project delivery; recent construction slowdowns mean more labor supply on the bid lists.
Notable Quotes:
“To this point, we have had really…no impact on our projects related to tariffs.”
— Kylie Harvey [61:12]
“It certainly seems like in the construction side of the business, some point nine months to a year ago, the spigot just shut off…[so] we have over the last eight months or so, seen the quantity of bidders increase.”
— Kylie Harvey [63:53]
Memorable Moments & Audience Energy
- First-ever Rent Roll live taping, “lots of energy in the room” [26:55].
- Several audience laughs as Jay jokes about construction technology: “It’s just amazing… you’re talking robots, dogs, drones…” [59:15].
- Jay: “The old hard hat is much more ... there’s much more going on now” [59:57].
Timestamps for Key Segments
- 00:42 – Market Shift: Small vs. Large Developer Share
- 03:25–12:12 – Market Data & Trends, Supply Slowdown
- 27:12 – Live Panel Introduction
- 27:53 – JPI Ownership & Long-Term Approach
- 30:45 – Building New vs. Buying Existing
- 36:09 – Advantages of Scale, Talent & Operational Systems
- 41:25 – Capital Market Consolidation, Role of Big Developers
- 45:28 – Investor Trends, Programmatic Deals
- 48:14 – Data-Driven Market Expansion Process
- 53:24 – Construction Innovation, Efficiency & Tech
- 60:25 – Tariffs, Immigration, Labor Market
- 63:53 – Labor Supply Side Effects
Conclusion
This episode provides an in-depth look at why, despite a difficult macro environment, some developers (notably those with scale, integrated platforms, long-term capital, and a willingness to innovate process and technology) see opportunity in the next building cycle. JPI’s strategy—grounded in data, operational efficiency, and capital relationships—illustrates both the possibilities and hurdles ahead. The conversation candidly balances optimism for innovation-driven progress with sober recognition of the struggles faced by small and mid-sized developers in the current landscape.
Listen to this episode for a front-line perspective on how one of the nation's largest multifamily builders is navigating, and at times redefining, the complex world of rental housing construction amid economic uncertainty.