Single Family Leisure: A New Real Estate Asset Class
Exploring the recent emergence of "SFL" as an asset class, bringing opportunities and challenges alike for real estate investors
Today’s Thesis Driven is a guest letter by Brian Ritter, Senior Director at Kasa. Ritter was previously a Vice President of Acquisitions and Asset Management at Rockpoint Group.
Vacation rentals, already earning favor with consumers prior to 2020, experienced a surge of popularity following the pandemic. Seasoned real estate investors have taken note, and several institutional investors have quietly entered the “Single Family Leisure” category. But there remain challenges to investing at scale. This letter outlines:
Recent secular demand shifts in the hospitality category and why institutional investors should pay attention;
The rise of single family leisure as an asset class and key metrics comparing the category to hospitality;
Fundamental risk analysis of the SFL category;
Headwinds—and potential mitigating factors—that investors and operators may face;
Why maturation of the SFL sector is a “when” not “if”.