Why are builders constructing Build to Rent?

[Lesley Resnick]

I am building new construction. I have built and sold off SFH. I have built some to keep for my own rental portfolio. Everything I have built has been sold or rented before I had the certificate of occupancy. My next build will be affordable townhouses. I am looking down the road and trying to decide what I should build after that. It is unclear if I should build and sell to retail buyer or investors?

In general, retail will pay more and want a higher quality product.

Build to rent is more utilitarian and they generally want a lower price.

It seems that I can make more selling retail than I can with build to rent.  All resources are scarce at this moment, land, labor & capital (I know it's a cliche).  Given that is the case, I can't  "make up the difference in volume".

I get the idea if you are Lennar and Blackstone will buy 100 unit neighborhood before it is built.

What am I missing?