Transcript
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Foreign welcome. It's episode number 66 of the Rent Roll, your podcast on all things rental housing, apartments build to rent and single family rentals. I know some of you are just getting back into the mix of things after the holiday break. Hope you had a great one. Welcome back. If you did miss it, last week's episode we shared our top 15 predictions for apartments and SFR in 2026. We had the great John Burns sharing his outlook as well. So check that out if you missed it. For this week's conversation, we're going to dive deeper into SFR and btr with our Q1 update and outlook. Why aren't we seeing that big pop in leasing activity and rent growth given that big discount to rent versus Own that we all hear about? That's been the big talk. Is that big discount, why is that not translating to a pop in leasing and rent rents? We're going to get into that today. That's the big question. And it's an interesting story. It's a nuanced one, but ultimately it comes down to the good old laws of supply and demand. So we'll talk about that and what it might mean going forward. And then next week we'll give our Q1 update and outlook for apartments as well. And so for multi family friends, we'll have a lot next week, but you don't have to wait that long. There's still some good stuff for you today as well. Lots of data and conversation on btr, which of course operates as kind of a hybrid between apartments and traditional scattered site sfr. And then also some some some headlines touching on apartments. We'll get to today in the news section and then also today's conversation, our interviews portion. It's going to be a good one. We've got with us Josh Hartman, the CEO of Next Metro. Josh, many of you may know Josh's story. If not, he's a former home builder who became one of the early pioneers of the build to rent movement in the Sun Belt. Next Metro was I think the first, or if not the the first and one of the first to start building BTR communities in Arizona, which of course became the epicenter of the BTR boom. And originally Next Metro thought it was just might be a cyclical play during the GFC period given the foreclosure crisis when people were obviously struggling to buy homes. But I think you'll really enjoy Josh's story today where he shares that their original thinking and hypothesis being that it was a cyclical play that turned out to be wrong it was actually a turned out to be a real business, as we all know now, in part because they learned that their renter demographic wasn't who they thought it'd be. And so I think you'll enjoy hearing that story and maybe do some myth busting as well, which I always like to do. Now, of course, next Metro has a substantial presence across not only Arizona, but also Colorado, Texas, Georgia and Florida. So stick with us for Josh's story and also get his take on where the BTR business is today and where it might be beheaded. All right, before we move on, I want to give a big shout out and thank you to our big headline sponsors. First and foremost to jpi, a leading apartment developer with a state of purpose to transform building, enhance communities and improve lives. Check them out@jpi.com also a big thank you to Madera Residential, a leading apartment owner and operator based in Texas and expanding into the Southeast. Check them out@madera residential.com all right, before I move on, I want to interrupt my own program with a special interruption here. So just as we wrapped up production on AN Episode number 66, President Trump posted on social media that he plans to work with Congress to, quote, ban large institutional investors from buying more single family homes. All right, so given this very big announcement, I want to make the unprecedented move to jump into a already scheduled and recorded podcast episode and add some quick thoughts here because obviously this is going to be top of mind for a lot of people in the SFR space. And I'll be writing more about this on my newsletter@jparsons.com if you want to get more detail. But a few quick thoughts. All right, just for right now, number one, I know some people may look at this as a big surprise, but it's really not. I want to remind you that this is something I talked about leading up to the election last year when we compared the housing policy plans between the Trump campaign and the Harris campaign. And what I noted for was that while Trump himself has not talked about single family rentals, his VP candidate, now VP had JD Vance, has been one of the most vocal Republicans opposing investors buying single family homes. And so, so there. So this is not a total surprise in that sense. Second point, this is an idea that's going to gain traction and already has gained traction among both parties. You know, I mention this all the time. One of the things I like about housing is it doesn't follow the traditional party lines like we see in a lot of issues. You have people who are pro development, anti development and both Republicans, Democrats are pro Yimby, and you have YIMBYs and NIMBYs in both parties and the same thing on issues like this, we're going to see more of a populist support among the populist wings of the Republican and Democratic parties. And that's happening because there really is a root issue, a root problem here. Right. So I want to downplay that. In fact, if anything, I want to upplay that actual root issue. This. So it's very easy for all of us to kind of think, oh, man, like this. It's just a bunch of misinformation. And yeah, a lot of that is. But it's stemming from a real problem, which is a shortage of housing combined with significant affordability problems for those families wanting to be able to buy homes. And obviously that's gotten more challenging given higher rates and high home prices. That's the root issue. And whenever there's a problem, people want someone to blame. You want to be able to finger point somewhere. And so we create this boogeyman. And so institutional investors make for a convenient target for people across both party lines or both political parties. But obviously, perception is not reality. And this is one of those topics. I've talked about this a lot, but this is one of those topics where perception is just so far distance from reality. And I'm gonna give you an example. I remember a couple of years ago, I read a paper from a HUD researcher, and it was about declining homeownership in Atlanta. But not once in this article about declining homeownership did the author mention that homeownership in Atlanta was actually going up. And it had been going up since the mid 2010s. And that type of alt reality nonsense leads into bad headlines, which leads into public perception, which then leads to bad policy ideas like this one. All right, so let's quickly just kind of recap the facts. So everybody kind of has this in front of you. What are the facts? Not the hot air, the actual data, the actual facts. Number one, institutional investors comprise about 0.5% of the single family stock in the U.S. that's a fact. Even in places like Atlanta, it's in the single digits. And people always say, well, you don't look at the national data. You got to look at places like Atlanta. Well, there you go. Number two, the vast, vast, vast, vast majority of single filet rentals are owned by small mom and pops that own a couple of properties on the side. And that is the biggest piece of the market. Those are also much More active buyers and institutional investors are in terms of who's buying. And so for the SFR market, even as a whole, institutional investors, about 3% of the market. And that's just, that's just the reality. Number three, contrary to conventional wisdom, like I mentioned, Atlanta also nationally, homeowners has been going up since the mid 2010s. It's about 2016. And it was going up, up until last year when mortgage rates shot up and affordability worsened, which, by the way, sidelined a lot of investors as well. But here's the fourth point. Here's the thing that I think a lot of people just don't fully understand. Even in the industry, I don't think people have this data in front of them enough to really point to this absolute fact from government data. Okay, so from 2015 and 2023, we added twice as many homeowners as we added for sale homes. 12 million net new homeowners, only 6 million for sale homes built. Now, how is that even possible? Because millions of rental homes, almost all of which were single family houses, have converted to owner occupied homes. And so that means, contrary to false narratives, individual homebuyers have actually been out muscling investors for market share. Again, that's not. JAY Parsons, Data Industry. That's, that's from the U.S. census. Okay, last thing I'll point out, most institutions in recent years have shifted from buying to building, and there's a lot of questions about how far this legislation can go. But they've been much more focused on new construction because frankly, there's a better opportunity there, there's better yields there. And when they're buying individual homes, they're looking for bargains. Those bargains were there in the early 2010s coming out of the affordability crisis, sorry, the foreclosure crisis, when home home buyers were largely sidelined. Those deals aren't really there as much today. And so, and remember too, an investor is looking at a cap rate. Individual home buyers are not, which is why they generally are going to win out on a competitive bid, contrary to the narratives we hear about. Okay, now it's worth noting that any proposal is going to require congressional, my understanding will require congressional approval. President Trump indicated the same in his post, and that's not necessarily a sure thing. There have been previous attempts at similar legislation, including as, as recently as a couple of years ago, and that failed even when the Senate and the White House were controlled by the Democratic Party. So we will see where this goes Again, I'll be sharing more of my newsletter@jparsons.com I'm sure we talking about more on here on the rent roll as well. But again, thanks for me. Interrupt. Now back to our regularly scheduled programming. All right, so as always, kick it off a little section we like to call Here's a chart. And we got a bunch of charts today. This segment is being brought to you by our newest sponsor, Mason Joseph Multifamily Finance, the number one FHA construction lender in the Southwest for a reason. Since 2016, Mason Joseph has closed as FHA Construction Loans in Texas and surrounding states as the second and third place lenders combined, according to my friends there. So check out Mason Joseph. All right, so let's start this section on an upbeat note before we dive in and get to some of the nuances. Maybe the more maybe call it bad news for lack of better term. Here's a chart that I mentioned this earlier. Everyone loves to show. This one for sfr. It's the cost of buying versus renting. The all in monthly costs as measured by our friends at John Burns Research and Consulting. And I'm sure everyone's seen some version of this chart and it's something John Burns himself mentioned on this podcast last week when he was our guest. Here's the latest numbers. It's $1,042 more per month to be a new home buyer of a starter home, not even any home, a starter home versus to rent a single family rental home. So that's obviously a big gap. It amounts to a premium of 41%, which is, which is pretty wild. Even you know that number is going to be big. I mean, 41 still hits pretty hard by comparison. The historical norm is about 16%. And so obviously, you know, easy math or about, you know, two and a half times that. So that gap is obviously a big long term tailwind for rental housing. But it doesn't necessarily equate to a boom times for SFR as we're seeing right now. All right, this next chart we're gonna see that in the latest SFR leasing indices from John Burns Research and Consulting, giving us a little bigger pulse, a little better pulse, I should say. On SFR Leasing, these indices are on a scale of 0 to 100 where a rating below 50 signals are contracting market. Anything above 50 is a growing market. All three of these indices are at or below 50 right now and they've declined versus 2024 levels. The first one is on leasing activity versus seasonal norms. The most recent one covers Q3 and the scores at 43 compared to 47 last year and 49 two years ago. So that means leasing activity is not great. It's not horrendous by any means, but it's certainly below normal for this time of year. And even with those sluggish home sales, again, people think a weak home buyer market is going to be a boon to sfr, but it's not. It never has been. SFR is much more stable in the home buying market, so we have a higher floor. But by no means is it boom times either. I talk about all the time. Second index, we're going to show you expected leasing activity over the next six months. And it's basically the same story. It's a score of 50 down from 52 last year and 52 two years ago. And so the SFR operators in the survey, they're basically saying, hey, we expect more of the same over the short term. And then the third index, I want to show you, this one's really critical. It's also the one that's most negative and it summarizes, I think, today's issues very well. It's the SFR Vacant Property Index. Time on market versus seasonal norms. How long are home sitting vacant between leases? And this score came in at just a 36 compared to 41 last year, 37 two years ago. So that means there's more inventory and it's taking longer than normal to lease out a vacant home. And remember, of course, a vacant unit generates no income while of course the costs continue and that puts pressure on operators. And then, you know, just real high level regionally. No real surprise, all three of these indices, they are weaker in the Sun Belt than other parts of the country. So they've got a lot of the population growth, the migration, the relatively speaking, more jobs and demand, but also a lot more supply than other parts of the country. Not only new construction from BTR and for apartments, but also growth. And this is a category we don't talk about as much, not just new construction, but also growth in new SFR listings or additional listings of homes that are available. And so on that note, here's a chart showing the number of SFR listings just among the nation's largest 15 SFR operators, again tracked by John Burns. They collectively saw an increase of listings measuring 14% year over year. Now. 14%, that's a big number, you know, particularly knowing that most of them probably did not expand their, their housing stock, their, their, their inventory nearly that much. Their portfolios, I should say. And while we've all talked about, we've all talked a lot about the impact of new construction as I mentioned earlier, in terms of, you know, newly built units. This is also part of the additional supply story. It's a really important point that we don't talk about as much. The new supply isn't just construction. It's also these additional listings, additional availability through. In this case it's, it's usually units that are vacant now taking longer to lease. Or it could also be those so called accidental landlords talk about sometimes. So those homes that may have been intended to be for sale, but for various reasons the owner has chosen to move on and to rent out that home instead. So we see that too. Bottom line though, more supply of any type, whether BTR or apartments or additional SFR listings, that's putting more downward pressure on rents. So here's another. This all relates to, I think an interesting survey question that the Burns team asked SFR operators. And this one I thought was, was, was really interesting. The question was what are your top concerns related to supply? And the reason that I, I thought this was interesting is the number one answer was not actually about SFR or btr. It was apartments. And this question went to SFR operators, not apartment property managers. 50% of them said apartment supply was a top concern. And of course we all know apartment supply has been at 50 year highs. And so of course apartment demographics, your typical renter, it tends to be a different profile than your typical SFR renter. You know, usually your apartment renders a little bit younger, less likely to be married, less likely to have kids. SFR likely skews a little bit older, more likely to have a family. But SFR operators clearly do see apartment supply as a competitive factor. So that's interesting. And then just under 50%, 47% said BTR supply was a, was a, was a big concern. And 33% blamed the rising number of SFR listings or listings that were shifting, I should say from for sale to for rent. And that was especially a big factor among operators in California and Texas, two obviously very different markets, but both seeing the same trend there. Now on the plus side, we do know new supply as in those newly built housing units that is going to drop off substantially both for apartments and for SFR. Burns data shows BTR dropping off below 10,000 units this year. That compares to 25,000 units at the peak. And then they show BTR units, BTR supply leveling off around 10,000 units in 2027. So we'll talk more about this trend in today's conversation with Josh Hartman at Next Metro. All right, Another thing on the plus side, we continue to see turnover, renter turnover as a tailwind. This has been a theme for the last really five years. Turnover remains very low and that hasn't changed much at all. The Burns team tabulated data from the SFR REITs and their annualized turnover rate is just 25%, which is very low. And that's a bit lower than last year. And last year was also very low. And it's been in that low to mid 20% range since 2020, and it's been in that. So that means it's been in that range even when homes were actually selling in 21 and 22. It's still been in the low to mid 20% range. So it's really not that correlated with home sales. Everybody always wants to say, hey, low turnovers because of lack of home purchases. It's really not that simple. Sure, it's contributing incrementally, but I always tell people this all the time, if a renter isn't happy where they are and they can't buy a house, they're just going to move to another rental for the most part. And so we just see fewer moves. And really this trend goes back not even five years. We've seen this gradually going back 10 years and really accelerated during the pandemic period. And so again, I do think the lack of home sales plays a role, but it's not a clear correlation between. There's no clear correlation between home sales and turnover. It's not as simple as people want to make it. So I think there's other factors at play here too, including people just waiting longer in life to get married and have kids and buy houses for reasons beyond just finances. As well as I think the other factor mentions all the time said this on this podcast, another factor is simply better management of rental homes. I think that plays a role too. A better experience is going to create a stickier experience. And so again, I think that's why turnover is just structurally going to be lower in this cycle than we've seen in the past. And by the way, first of all, one last comment there, I mean, think about Too is the 2010 is really a decade of figuring things out. And I think after now a decade plus of the business model, we've seen operators just get better at it. All right, so let's put all those demand drivers, headwinds and tailwinds together. Here's where we are with rents. Burns data shows SFR rents are on pace for their slowest growth in 12 years, right around 2%. Right now, Burns is forecasting less than 2%. Actually 1.8% for 2026. And again, they point to supply. I want to read this quote from the last report, which by the way, they put out great reports. If you're not getting those, here's what they wrote. We are watching rising for sale inventory in most markets, which we believe will increase SFR supply and continue to soften SFR new lease asking rent growth. Okay, so more for sale inventory equals more for rent inventory in their view, either via builders who are selling off homes to SFR operators or individual owners choosing to rent out their old homes instead of trying to sell them. By the way, the on the build to rent side, those rents have been even softer. They're down 10 bips year over year in the most recent data. So that's tracking a little more closely with apartments departments. And of course, you know, when every time I talk about national data, it does vary a lot by parts of the country, by different regions of the country, we still have quite a few, quite a handful of number, quite a number of markets that are still seeing strong rent growth for SFR and are likely positioned for more of the Same here in 2026. Among the markets topping 5% rent growth for SFR, that list includes Knoxville, Visalia, Chicago, Long Island, Chattanooga, Baltimore, Milwaukee, Richmond, St. Louis, Lexington, Kentucky, Columbia, South Carolina, and among larger markets, the Midwest. Just like with the apartment data, the Midwest stands out. Not only Chicago, which we mentioned earlier, but also Cincinnati, Columbus, Indianapolis, Minneapolis, Cleveland and Detroit, among others. And then of course, we get to the list of where the rents are falling. And just like with the apartment sector, SFR rents are falling in the higher supplied markets. For the most part, rents are down more than 3% in Austin as well as much of southwest Florida. Also seeing rent cuts in places like Dallas, San Antonio, Phoenix, Orlando, Tampa and Raleigh, among others. And then, you know, one observation here, the supply trends, both for sale and for rent, they tend to align and correlate with home prices. So where there's more supply, that means there's more inventory. And that puts downward pressure on prices as well as rents. And so SFR rents are actually broadly correlating with home prices as well. SFR rents are falling where home prices have fallen predominantly across the higher supplied Sun Belt. SFR rents are increasing in the Midwest where home prices are increasing. So it's yet another reminder that again, a rising tide boosts all ships, a receding tide pulls back all ships. I know this. I mentioned this again, I mentioned this a lot of times I mentioned it again is that SFR tends to do better when homes are selling and home prices are increasing. There's more move outs to purchase. Yeah, but typically that's because there's more household formation and so you're going to back for those units faster and often at a higher rent. I'm going to keep saying it till more people believe it. All right, one more thing on rents before I move on. Just like with apartments, here's the silver lining on the weak rent trends that we've seen. Wage growth has exceeded rent growth for now three straight years, about 36 months and counting. And I think we're going to see the same thing here in 2026, barring some epic collapse in wage growth or some epic surge in rents. The most recent data shows wages up 4.1% compared to SFR rent growth of 2.1%, BTR rent contraction of 0.1% and apartment rent cuts of negative 0.7%. So over the longer term, improved affordability does help widen the demand funnel. But in the shorter term, a heightened supply is a stronger counterbalancing factor right now, putting downward pressure on rents. All right, as we wrap this up, let's quickly touch on SFR sales, acquisitions as well as capital markets. First, one of our favorite misunderstood topics are large investors buying up all the homes. Well, obviously the reality has never been anywhere near the narrative, and it's more of the same. In the most recent data, large investors bought fewer than 12,000 homes across the country over the last 12 months, amounting to just 0.5% of home sales. And that's just, you know, among acquisitions, it doesn't even count for dispositions, some true, true net flows. So again, contrary to narratives, they continue to be a rounding error in home sales even more now than a few years ago. And for larger investors, we've mentioned this a lot, so I won't belabor the point here. There's been more interest in BTR as well as portfolio acquisitions, but even those categories have been limited. Primarily challenges around the cost of capital and the disconnect between buyers and would be sellers. So BTR sales remain muted about 1.1 billion nationally. That's through most of Q3 of 2025. So you don't have the Q4 data yet. But barring a big surge in that Q4 in those Q4 numbers, it's unlikely we're going to match the 2.7 billion in BTR that traded in 2024. And we're way below the peak of 4.1 billion set in 2021. And that data comes from Yardi and Burns. Cap rates, though, haven't changed much as much as would be. Buyers would like to see more cap rate expansion. That's just not happening. BTR cap rate's still in the low five, so while it's up from the the cheap debt era in the early 2000 and twenties, it's low fives is similar to where we've been in these last few years. All right, that's going to wrap up our Q1 update. Now let's now let's jump into rental housing trivia. All right, now let's transition to rental housing trivia. Today's trivia is presented by landing a full service furnished housing partner, helping operators drive incremental noi. Simply landing turns vacant units into revenue. Learn more@hello landing.com partner and do put that SL partner in there for me. Goodbye vacancy, hello landing. All right, so today's question we stick in our BTR topics today and here for our for the for the trivia question it is which BTR product type added the most newly built units in 2025 and is likely to lead again in 2026? I'm giving you four categories here. Is it A cottages or slash horizontal apartments? So people call it different things. B detached single family homes, C single level row homes or D townhomes. So again, which of those we add the most of in 2025 and are scheduled to add the most of again in 2026? Now I do want to add one important caveat here, which is that we're measuring units specifically within BTR communities. And so we are excluding that, you know, so called excess homebuilder inventory. They're selling off, you know, kind of scattered site newly built houses in a for sale subdivision that a home builder is selling off to an SFR operator. So we're excluding that. We're looking at BTR communities. Which product type are we growing fastest? All right, next up in the news. All right, in the news this week is sponsored by Authentic. If you've got a property that's underperforming and you can't quite figure out why, check out their multifamily leasing and marketing audit. They'll dig into your pipeline, your leasing funnel and comps and tell you exactly where things are breaking down, plus strategies on how to fix it. Listeners of the pod get 50% off. So head to authentic ff.com click on the banner to learn more and claim the offer. All Right. So we've got three headlines for you. The first one comes from the Wall Street Journal. It says the condo market hasn't been this bad in over a decade. Condo prices this fall posted their biggest decline since 2012, hit by rising homeowner association dues and weaker demand. All right, so condos, you know, they kind of hit a sweet spot between a multifamily and single family because we have obviously condos bought by investors that are rented out as well. So that could be shadow market rental competition. And of course, we've also had in the past more so in the past than today, developers who do both multifamily rental and for sale. But that's changed for a lot of reasons, you know, so as I read this article, it reminded me, I just think condos today are tough for so many reasons. You know, for, for the prospective condo buyer. You know, what's happened is now you have the down payment, which is now obviously higher, and the mortgage payments, I'm sorry, the down payment plus the mortgage is obviously higher as well. And on top of that, though, you have increasingly rent, like HOA dues, and now you have kind of iffy liquidity. And the other thing I don't think talk about enough is you have, in the last 10, 15 years, we built so many condo quality apartments that now there's comparable alternatives to rent instead of buying a condo. And I think that makes it tougher to then sell that condo as well. And so unless you're in Miami or Manhattan or other places like that, or in your, in some kind of resort vacation town, it just seems like a tougher bet today. And then of course, from the developer standpoint, you got these, all these big issues around builders, liability risk being liable, increasingly liable for the building long after you sell off the units. And that's just a big hurdle to overcome. So I do think condos can play an important role in the housing market. They may fill a gap, but yeah, it's just a, it's just a tough market until we solve for some of those issues. All right, next one. This comes from a paper by the American Enterprise Institute. I'm sorry, aei. The headline is America's Housing Crunch has the wrong villain. All right, this is a good read and does a good job showing data to dismantle those dumb myths around the role of institutional investors in the single family housing market, particularly their impact on supply and prices. Worth the read. Some good data hit in this. This is a blog that kind of summarizes some of the key things from Their study. I particularly appreciate how the author pokes holes in the arguments among those. Say, hey, you know, I hear this whole time, the national stats don't matter. You know that 0.5% of institutional, of home sales going institutional investors, that doesn't matter. What matters is you have to look at individual places like Atlanta, right? And so the author of this piece, they hear that same criticism and they. And check out what he says. He writes this, no county exceeds a 10% ownership share, meaning that no, the institutions represent less than 10% everywhere. Even in frequently cited metros such as Atlanta and Houston, institutional ownership sits in the low single digits. Most zip codes are far below even those levels. And that's a really important point. And again, he's talking about total ownership share. So sometimes you look at, okay, just institutional owners versus all SFR owners. That's not the full story. If you look at the impact of the housing market, look at all what share they control of the entire single family universe in these areas. And it's again, no county exceeds even 10%. So that's not. That still makes them a small piece of the piece. And it goes on to say this. If institutional investors were the prime driver of prices, the hard causality pattern would be hard to miss. But not so much in reality. Since 2012, national home prices have risen roughly 150%. Yet some of the fastest growing markets for prices, including San Jose, Bend and Providence, have virtually no institutional presence. Several metros with higher inventory shares, I'm sorry, higher investor shares, have seen below average price growth. Econ 101. Scarcity, not financialization, does the heavy lifting here. So very well said. It's all about supply and demand. It ain't that complicated. All right, our last headline today, it's another one from the Wall Street Journal that says Dallas is booming except for its downtown. Texas City's central business district faces a crisis as companies look for snazzy suburban alternatives to aging office towers. All right, so this article came out right before the big news. One of Downtown's biggest employers AT&T is relocating its headquarters to the legacy area of Plano, which is already home to a lot of major employers right near the intersection of 121 and the Dallas North Tollway, which is quickly becoming the urban core or central hub of the booming DFW suburbs. Feels like everything's doing there these days. So what's going on downtown? You know, I'll tell you a funny story. So I moved to Dallas in, I think it was 2004, 2005, and even back then, I remember occasionally I'd work downtown. And if you were there on a Saturday, I remember having to like drive in my car out of downtown just to go to lunch. And then we finally, I shared the story recently on social media. But I remember when we finally added a Subway restaurant, the sandwich stop near our office. That was a huge deal because we finally had something to eat nearby. Like, they're just not a lot of options, especially in certain parts of downtown, unless you're in kind of the right spot. So it's gotten a little better since then. But downtown still has a ways to go and there's been some stops and starts since then as well. Downtown's lost a lot of to in terms of, you know, jobs and people and restaurants and amenities to next door uptown, just, just north of downtown. And then uptown's really become the urban heartbeat of Dallas. A lot of employers have gone there, as I mentioned earlier. That's where a lot of apartment construction's gone. Restaurants and retailers have followed. And so, and I think even more than that, you know, downtown has never really recovered from the SNL crisis of the 1980s. Now you've got a lot of, most of it was built prior to that, honestly. I mean, very different from other parts of Dallas. To have any major part of Dallas that where most of its buildings predate that period. Now you have a lot of aging office towers in downtown and they need a lot of work. Another big employer, bank of America, they've been occupying the biggest tower downtown, the one, the big lights on it. If those of you know the downtown skyline, they announced, they, they've been there for decades and they announced plans to relocate, but also just to next door uptown. So they're staying in the city of Dallas, but going uptown, you also hear issues with crime and quality of life downtown. So downtown does have its work cut out for them. I think over the very long term they'll probably figure it out. Some of you Dallas people remember that uptown. Dallas was left for dead back in the 80s and early 90s and now it's the place to be. So it could happen for downtown too, but it's probably going to take a while. All right, let's get back to today's rental housing trivia question. The question was which BTR product type added the most newly built units in 2025 and likely to lead again in 2026? Is it cottages, detached single family homes, single family row homes or townhomes? And the correct answer is D townhomes. According to the Burns data, we've added nearly 4,000 BTR townhome units in 2025. Scheduled to add around 2,200 in 2026. Sorry, that's a lot of 2020 numbers to read off. And that is just above the numbers for the second place category which is detached single family homes. And again, we're looking specifically at units within BTR communities. All right, next up, it's time for today's interview sponsored by funnel, the AI and CRM software trusted by four of the six major REITs and many more leading operators like BH and Cortland. To learn how Funnel can help your property centralize operations and automate everyday tasks, visit funnelleleasing.com okay, our guest today, he's one of the early pioneers the build to rent movement in the Sun Belt. He's a former home builder who jumped into BTR in the early 2000 and tens before it was the cool place to be. Josh Hartman, the CEO of NEXT Metro, based in Phoenix and building cottage style BTR communities across the Sun Belt. Let's jump in.