Bluerock Homes Expands Sunbelt Residential Portfolio

The REIT doubled down on value-add opportunities and development in key U.S. markets while navigating macroeconomic and regulatory pressures.

March 21, 2025

Expanding Reach Through Targeted Investment

Bluerock Homes Trust is scaling up its presence in high-growth residential markets across the Sunbelt and Western U.S. In 2024, the REIT closed the year with 23 investments totaling just over 5,000 units. These span both wholly owned assets and preferred equity and loan positions, all aimed at delivering long-term income and capital appreciation.

The firm’s strategy is built around sourcing institutional-quality residential real estate—including single-family rentals, build-to-rent projects, and multifamily communities. The focus: invest in regions with strong demographic trends and employment growth, then create value through redevelopment, new construction, and data-driven asset management. As of year-end, Bluerock’s consolidated operating investments were nearly 94% leased, excluding held-for-sale and renovation units.

Diversified Deal Structures and Capital Sources

What stands out is how Bluerock blends its investment approach. Some deals are executed through direct ownership. Others come through preferred equity, loans, or its DST Program —an initiative that raises capital through private placements into Delaware statutory trusts. These DSTs offer tax-efficient opportunities for like-kind exchange investors while providing Bluerock with new avenues for growth capital.

In 2024, the company acquired new assets in markets like Charlotte, Tampa, and Jacksonville. The additions include stabilized properties and ground-up developments, supporting both current cash flow and longer-term upside. At the same time, Bluerock exited several positions where business plans had run their course or capital could be recycled elsewhere.

Dividend Policy and Income Strategy

Quarterly dividends of $0.125 per share are now in place for both Class A and Class C common stock, targeting a $0.50 annual yield. The Series A Preferred Stock carries a floating dividend rate, currently set between 6.5% and 8.5% depending on SOFR benchmarks. Management expects future distributions to reflect cash flow performance, acquisition activity, and broader capital needs.

While the investment thesis is clear, there are headwinds. Inflation, insurance costs, rising interest rates, and ongoing regulatory scrutiny are all on the company’s radar. Proposed policies aimed at curbing institutional ownership of residential housing could impact growth strategies. HOA restrictions, climate-related risks, and shifting property tax dynamics also factor into portfolio decisions.

External Management and Operational Priorities

Bluerock is externally managed, and its leadership team oversees everything from acquisitions and development to leasing strategy. The management agreement runs through late 2025, with automatic renewals unless terminated. No key man insurance is in place, though continuity remains a priority given the platform’s reliance on a small team of senior executives.

Operationally, the company is investing heavily in its tech stack. A proprietary data warehouse provides real-time visibility into leasing, maintenance, and renovation metrics. Smart home integrations and lease automation tools are already in place. The goal: use technology to improve performance across scattered-site and community assets alike, while increasing NOI margins over time.

The Role of the DST Program

The DST Program also plays a dual role. It helps raise capital through private placements, while keeping Bluerock closely tied to the underlying real estate through long-term leasehold interests. The REIT retains the option to repurchase these assets at fair market value later on, creating a pipeline of reacquisition opportunities. That said, the structure introduces complexities around property liquidity and tax considerations that will need to be managed closely.

Positioning for the Road Ahead

Looking ahead, Bluerock plans to keep leaning into core markets that combine population growth with knowledge-economy job expansion. The investment lens will stay tight: focus on assets where operational improvements and thoughtful capital investment can drive value. With nearly $70 million in public float, the REIT remains small by market standards—but it's moving with clear intent.

As market conditions evolve, Bluerock is building a portfolio designed to withstand volatility, while positioning itself to capture upside when the timing is right.