The American Dream Being Leased Out In Southwest Riverside County

MENIFEE, CA — A new community of single-family homes with backyards is coming to Menifee, but the residences will not be up for sale.

Instead, the 303 brand-new homes will only be available to renters.

On Wednesday, developers and Menifee city officials celebrated the groundbreaking for Adler Ranch, a single-family rental home community to be located at the corner of Antelope Road and Craig Avenue.

Adler Ranch is slated to feel like any other new housing development. The new single-family homes will feature three- and four-bedroom options; energy-efficient, stainless-steel appliances; attached two-car garages; keyless front-door entry; solar panels; and fenced backyards. Community amenities will include a junior Olympic lap pool, picnic pavilion with BBQs, event room with prep kitchen, covered cabanas and a dog park.

Construction is expected to continue through 2022, with a grand opening planned for early 2023, according to Tricon Residential. Tricon will operate Adler Ranch while Foremost Pacific Group is the project's developer and Woodbridge Pacific Group is the general contractor.

Adler Ranch is part of Tricon's previously announced pipeline of 3,000 new "build-to-rent homes" across 23 communities in the U.S. Sun Belt.

Tricon, Foremost and Woodbridge have partnered on another Southwest Riverside County build-to-rent community. In November it was announced the three had broken ground on Bacara, a townhome rental community in Wildomar. Located at 24808 Preilipp Road, Bacara will feature 170 one-, two- and three-bedroom options.

In December, The Hoffman Company announced it had closed the sale of 26-acres in Wildomar envisioned for a build-to-rent townhome community. Developer Sancerra Communities and STG Capital Partners plan to build a neighborhood of 163 townhomes at Palomar Street and Jefferson Avenue with construction scheduled to begin late this year.

Build-to-rent communities are a recent trend in response to demographic shifts, high housing costs, and the evolution of customer preferences.

"The Southwest Riverside County/Temecula submarket is attractive from an investment standpoint. With year-over-year rent growth approaching 20 percent, vacancy rates hovering near 3 percent and one of the fastest-growing populations in the Inland Empire, the submarket has outperformed most markets across the country since the start of the pandemic," Marcus Cook, managing partner of Sancerra Communities, said in a released statement following the close on the 26 acres in Wildomar. "We are particularly bullish on build-for-rent communities in supply-constrained markets like California."

There is plenty of investor demand for build-to-rent opportunities in California, but opportunities are scarce, according to Justin Woodworth, managing director of multifamily markets for The Hoffman Company

"This [build-to-rent] model has worked best where land is plentiful and cheap, and development costs are low," Woodworth said.

Menifee, Wildomar, Lake Elsinore and Murrieta still have space, and development costs are lower than many other Golden State communities.

According to Josh Welty, vice president of development for Tricon, the Adler Ranch groundbreaking in Menifee creates additional housing in California "through a highly desired product in purpose-built rental communities."

He added, "Adler Ranch is designed for individuals and families who desire the benefits of living in a single-family home and prefer the convenience and flexibility of a rental lifestyle. By providing residents an exceptional maintenance-free experience, they will have more time to spend on what is most important to them."

The cost of that "exceptional" rental lifestyle will be determined when the properties come up for lease.