Tower Capital arranged a $29.5 million in construction financing for the development of a Build-to-Rent (BTR) community in Dallas. Tower Capital’s Kyle McDonough, George Maravilla, David Stull and Noah Schott arranged the financing on behalf of an undisclosed sponsor.
By Adam Finkel
I categorize the multifamily market in 2025 as resilient. My outlook for the multifamily market is that it remains a top investment choice due to ongoing housing shortages and strong population growth in markets like Phoenix. The metro has added 13% more jobs since 2019, well above the national average, and continues to attract in-migration. This demand supports occupancy rates and rent growth even as new units are delivered. Builders are adapting with innovative incentives like rate buydowns, which help close the gap between renting and buying. Additionally, Phoenix’s position as a hub for economic and high-income growth reinforces its appeal to both investors and residents.
The multifamily market still faces headwinds, including elevated interest rates and rising costs of ownership, such as taxes and insurance. Phoenix, while growing, has 37,000 units under construction, which could lead to short-term supply pressures, increasing concessions, and slowing rent growth. Developers are also grappling with margin compression due to high land prices, labor costs, and materials, and affordability remains a significant issue for many renters, further challenging the market.
The biggest pain points for the multifamily market in 2025 will be the combination of margin compression and affordability challenges. I see those as among the toughest hurdles. Rising property taxes and insurance costs, along with stagnant or declining rents in certain areas, could erode profitability. Phoenix’s housing supply is aging—40% of its stock is over 30 years old—which makes renovations expensive and further impacts the affordability of rental units. Additionally, navigating a potentially slower rental market as new deliveries come online may put pressure on landlords and investors.
If there is a silver lining for the multifamily sector in 2025, it could be that Phoenix’s strong economic fundamentals will be its saving grace. The city is seeing above-average job growth, high-income household growth, and sustained in-migration—all of which fuel demand for housing. Multifamily absorption rates are projected to keep pace with new deliveries, and the long-term outlook remains positive. Build-to-Rent communities, which have gained traction in Phoenix, present a unique opportunity to bridge the gap between single-family and multifamily living, offering investors solid returns while catering to renter preferences.
Despite concerns about overbuilding, an unexpected surprise in the multifamily market may be that absorption could outpace expectations due to Phoenix’s unique combination of in-migration, job growth, and its status as a high-income growth market. Additionally, while many expect multifamily demand to cool, lower-than-expected deliveries beyond 2025 (6,200 in 2026, fewer in 2027) could create a supply crunch sooner than anticipated, giving a second wind to rent growth and property values
A Valley-based pioneer in the build-to-rent sector says it will be able to continue its rapid growth and expansion with a $300 million recapitalization. Plus, our weekly roundup of Valley real estate deals includes updates on industrial and retail properties, and new projects getting underway.
Tower Capital arranged two loans totaling $36.95 million for the refinance of Poplin Meadows and Poplin Trace, Phases 2 and 3 of an overall 268-unit Build-to-Rent (BTR) development in Charlotte, NC. Tower worked on behalf of the borrower to secure two-year, floating-rate loans through a debt fund. These loans replace the initial acquisition loan obtained by Tower in July 2021.
Poplin Trace, new luxury townhomes located just outside Charlotte in Indian Trail, North Carolina. Poplin Trace home, you’re getting much more than a place to live. Functionality and craftsmanship boasting high-quality finishes that bring life to the space. A selection of various thoughtfully built three-bedroom townhome floor plans with attached one and/or two-car garages, each providing a unique sense of privacy and area that only Poplin Trace can offer.
Tower Capita l's Phoenix-based build-to-rent finance team was founded in 2015 and is led
by co-founder and principal Kyle McDonough and partner George Maravilla. Tower Capital is
one of the most active structured finance firms in the commercial real estate sector
arranging capital for BTR single-family-style projects with more than $1.5 billion in BTR
construction financing and joint-venture equity encompassing more than 7,000 units
across nearly 40 communities nationally. Tower Capital 's BTR finance team advised on
more than $414 million in BTR construction financing in 2023, making it a go-to
structured finance advisor for lenders and developers. Recent BTR transactions Tower
Capital has arranged include a $72.9 million financing for the Village at Golden Triangle, a
317-unit BTR community in Fort Worth, TX; the $62.4 million non-recourse construction
financing for the development of the Village at Hutto Station, a 276-unit BTR community
north of Austin, TX; $88.5 million in construction financing for Village at Bronco Trail, a
354-unit development by Scottsdale-based Empire Group; and $120.5 million in financing
for two BTR communities in the Phoenix market.
As Tower Capital’s Senior Transaction Manager, Donna Ransom brings more than three decades of experience in land banking, homebuilding acquisition, commercial project management, and master planned community land development to the company. During her time with the Arizona-based private real estate capital advisory firm, she has facilitated more than $2 billion in transactional activity. She played an integral role in developing Tower Capital’s transaction processing handbook that has driven efficient and smoother closings of financing executions, resulting in reduced risk for all involved and solidifying long-term, trusted relationships with clients.
Net lease is the backbone of the commercial real estate industry, representing some of its most important asset classes. The men and women who work in this space must have a wide array of knowledge at their disposal to navigate these categories and their many underlying issues. Our selection of influencers has a hard-won right to be on these pages as they make their mark in a highly competitive industry.
At a recent Connect Multifamily event in Dallas, an experienced panel weighed in on how they assess the current market environment.
Tower Capital’s George Maravilla expressed a common belief about supply: “Yes, we’re overbuilt. The Sunbelt is oversupplied…but it feels like a temporary situation. There are a lot of vacancies, but the light at the end of the tunnel is that starts are way down.”
Adam Finkel and Kyle McDonough founded Tower Capital in 2015. Since then, the company has completed more than $3 billion in origination volume. The firm’s pipeline of projects spans multiple states including Arizona, Texas, Alabama, North Carolina, Colorado and Indiana.