Why Institutions Flocked to Atlanta But Skipped Buffalo: Decoding the Single-Family Rental Divide
By Alan Findlay
By Alan Findlay, Founder and Director, Abbotsinch Capital
Having cut my teeth in real estate across continents—from the competitive frenzy of London to the steady revival here in Buffalo – I’ve long observed how capital flows chase not just yields, but scalable growth. The stark contrast in institutional investor activity between markets like Metro Atlanta and Buffalo, New York, is a prime example. Over the past decade, large institutions – firms owning hundreds or thousands of properties, such as Invitation Homes and Progress Residential – have poured into Atlanta, snapping up tens of thousands of single-family rentals (SFRs). Yet in Buffalo, their footprint remains virtually nonexistent, under 1-2%. Why the divergence? It’s not random; it’s rooted in economics, demographics, and market.
- Explosive Population and Job Growth: The Sun Belt, including Atlanta, has driven 75-80% of U.S. population growth over the past decade. Corporate relocations (tech, logistics, finance) and migration from high-cost areas fueled demand for rentals. Strong job markets and housing shortages create reliable tenant pools and rent growth—essential for institutional models relying on predictable cash flows and appreciation.
- Favorable Economics for Scale: Lower entry prices post-crash, combined with high rental yields and potential for value-add renovations, allowed bulk acquisitions. Suburban sprawl provided homogeneous properties easy to standardize and manage centrally. Less stringent regulations in many Southern states eased operations compared to pro-tenant Northern markets.
- Appreciation Potential: Institutions seek not just cash flow but capital gains. Atlanta’s booming economy delivers both—home prices and rents rising faster than wages, supporting portfolio growth.
| Key Driver | Atlanta (Sun Belt Appeal) | Buffalo (Rust Belt Reality) |
|---|---|---|
| Population Growth | High (migration + jobs; 75%+ of national growth) | Stable/slow (revival but no boom) |
| Post-Crisis Distressed Stock | Abundant suburban foreclosures | More urban, scattered; earlier wave less scalable |
| Appreciation Outlook | Strong (2-3%+ annual; growth metro) | Modest (cash-flow focused; slower gains) |
| Regulatory Environment | Generally landlord-friendly | Stricter (NY laws, local policies deter scale) |
| Property Homogeneity/Scale | Suburban tracts ideal for bulk management | Older, varied stock; harder to standardize |
Buffalo’s Resilience: Why Big Institutions Stay Away
In Buffalo, investor ownership has climbed to ~33-35% of residential stock over the decade, driven by affordability and solid 10-16% yields. But it’s overwhelmingly small “mom-and-pop” (1-5 properties) and regional medium players—locals who know the market intimately. National giants like Invitation Homes or Progress Residential? Their market lists span Sun Belt cities (Atlanta, Phoenix, Dallas, Tampa, Charlotte)—no Buffalo in sight.
The reasons mirror Atlanta’s attractions in reverse:
- Limited Growth Dynamics: Buffalo’s revival is real—Zillow’s “hottest” rankings, medical campus billions, Tesla proximity—but it’s steady, not explosive. Population growth lags Sun Belt metros; the economy relies on stable anchors (healthcare, education) rather than rapid influxes. Institutions prioritize markets with demographic momentum for long-term appreciation.
- Post-Crisis Inventory Mismatch: Rust Belt foreclosures hit earlier (pre-2007, urban LMI areas), often scattered and less suitable for bulk suburban-style buys. Properties here are older, varied (e.g., Buffalo doubles), requiring hands-on management—not ideal for distant institutions.
- Cash Flow Over Capital Gains: Buffalo shines for yields, but appreciation is slower. Big players want both; here, returns reward patient locals, not scale-seeking funds.
- Operational and Regulatory Hurdles: New York’s landlord-tenant laws are tougher; recent policies (e.g., 2025 institutional buy moratoriums on 1-2 family homes) signal caution. Smaller deal sizes and local competition deter institutions seeking $25M+ opportunities.
- Scale Challenges: Managing dispersed, aging stock from afar is costly. Local knowledge trumps—out-of-town flips often flop due to overlooked nuances.
The Takeout: Opportunity in the Overlooked
This divide isn’t a flaw; it’s a feature. Atlanta’s institutional dominance brings scale but scrutiny—higher evictions, affordability strains, wealth outflow. Buffalo preserves accessibility: small investors build wealth locally, with less competition inflating prices.
For discerning capital, Buffalo offers what Atlanta lacks—entry for everyday players, resilient cash flows, and upside without the crowd. We’ve seen it firsthand at Abbotsinch: modest entries compounding into robust portfolios.
Institutions chased Atlanta’s growth story; they bypassed Buffalo’s stability. That’s our edge.
Interested in Buffalo’s high-yield, low-competition landscape? Reach out – alan@abbotsinchcapital.com or +1-716-436-1296. The Rust Belt doors remain open to those who value substance over spectacle.
