Tower Capital, one of the nation’s leading structured finance firms in the commercial real estate lending space, arranged $120.5 million in financing for two Build-to-Rent (BTR) communities in the Phoenix market. The lease-up bridge and construction financing is for the newly developed Village at Pioneer Park, a 332-unit project, and Village at Skyline Ranch, a 167-unit project. Tower Capital’s Kyle McDonough, Principal and Co-Founder, along with George Maravilla, Senior Vice President, arranged the financing on both deals.
“Institutional investors continue to be attracted to single-family BTR communities because they recognize the undersupply of housing, and these single-family communities operate similar to multifamily assets,” said McDonough. “The appeal for investors is the exceptional renewal rates and BTR’s appeal to a wide range of renters. Consumers also favor these communities because they tend to be higher end properties that live like a single-family residence.”
Tower Capital arranged $78,500,000 in non-recourse bridge financing for Village at Pioneer Park, a newly constructed 332-unit Build-to-Rent community developed by Scottsdale-based Empire Group. The community features a clubhouse, pool and fitness center, along with pet washing station and dog park. The bridge loan refinanced the project’s construction loan at final certificate of occupancy. It also allows the Sponsor time to stabilize the asset prior to putting a permanent loan in place.
The property is situated on 30.2 acres at 8405 W. Olive Avenue in Peoria and features units that average 921 square feet. Units include solid surface quartz countertops, stainless steel appliances, premium kitchen back splashes, full-size washers/dryers, and upgraded smart-home features and technology. Each home offers a private yard.
Tower Capital also arranged $42,000,000 in non-recourse construction financing for the Village at Skyline Ranch, a Build-to-Rent community also being developed by Empire Group. The in-fill site at 13215 W. Glendale Avenue in Glendale is near Luke Air Force Base and related off-base housing. The newly emerging area is also adjacent to major industrial/distribution parks along Loop 303.
The property will consist of 167 luxury units featuring one- and two-bedroom layouts, walking paths, community areas, a dog park, clubhouse, fitness center, pool and spa. The project encompasses five detached residences and 81 duplex residences, all of which will feature private entrances, nine-foot ceilings, a full-sized washer/dryer in each unit, luxury vinyl faux wood flooring, private backyards, stone countertops, stainless steel appliances and smart home features and technology. The property will also feature 60 detached garages and 60 storage units once delivered in 2024.
Maravilla added, “We continue to see strong demand for BTR communities across the country due in large part to the shortage of affordable housing options in many markets where people desire to live. These two communities will add nearly 500 units of rental housing to the high-growth Phoenix market. People also appreciate that a Build-To-Rent community typically offers a larger array of amenities that match their lifestyle.”
Tower Capital has closed more than $1 billion in BTR construction financing and joint venture equity encompassing roughly 6,000 units across 35 build-to-rent communities and continues to be a leader in the marketplace with over $300 million of Build-To-Rent construction loans scheduled to close over the next 60 days. The firm’s pipeline of projects spans multiple states including in Arizona, Texas, Alabama, North Carolina, Colorado and Indiana.
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