Lenders launch bespoke lending programs to tackle funding gaps
Red Oak Capital, Pensam, and Tower Capital are among the managers rolling out or expanding customizable programs.
Red Oak Capital, Pensam, and Tower Capital are among the managers rolling out or expanding customizable programs.
Tower Capital announced Monday it has arranged $185.7 million in financing for four build-to-rent housing developments in Arizona and North Carolina totaling over 700 units, saying it expects the demand for...
Phoenix-based Tower Capital has arranged $185.7 million in financing for four build-to-rent communities–three in Arizona and one in North Carolina–with a total of 741 units.
Tower Capital has closed more than $750 million in financing transactions for BTR developments and has another $500 million of projects in the pipeline. Since 2018, the firm has closed financing on 30 BTR communities, with more than 5,000 units across multiple states including Arizona, Texas, Alabama and North Carolina.
Tower Capital arranged $185.7 million in financing for four Build-to-Rent (BTR) developments that will result in 572 units delivered in Arizona, with one in North Carolina. The financing encompasses three new projects in the Phoenix market, including $67.4 million for Village at Carver Mountain, $59.6 million for Village at Sonoran Vista, and $21.2 million for Montana Del Sur.
Tower Capitals’s Kyle McDonough has more, “Rising mortgage rates are causing potential buyers to take a look at single-family rentals, which can offer more affordable economics compared to buying a house, while delivering the lifestyle and flexibility they seek. For those reasons, it is expected that demand will continue to increase for BTR’s.” Tower Capital has successfully closed more than $750 million in financing transactions for Build-to-Rent product.
Tower Capital also arranged $3.6 million in acquisition financing for Avalon, a 12-unit apartment asset in Phoenix.
The global economy, commercial real estate included, has forced some lenders and investors to sit on the sidelines. Changing interest rates, inflation and recent shifts have resulted in investors losing deals and having to push the pause button. The volatility has slowed down activity and market rates have moved quickly.
Some experts believe interest rates for debt could rise 200 to 300 basis points, which would not favor borrowers. Not only will that make it challenging to underwrite deals, but many will no longer even pencil, especially those expecting to find a low cost of capital.
David Stull joined Tower Capital in May 2021 as an Associate, Debt, Equity & Structured Finance. He serves as a capital intermediary, structuring various types of debt and equity financings on behalf of private and institutional borrowers across all asset types nationwide. He quickly emerged as a rising CRE finance leader at the firm in both deal activity and leadership qualities.
Within his first year of joining the firm he has completed 18 transactions totaling over $57 million.
Scottsdale build-to-rent developer starts a third-party construction firm to help other developers build these hybrid communities that put detached single-family homes in rental communities. Here's what is happening.
Tower Capital arranged more than $20 million in non-recourse construction financing for Proximity 7th, a build-to-rent (BTR) multifamily community being developed by Avenue North real estate investments in Phoenix. The seven-acre property is located at 801 E. Euclid Ave. and will house an 84-unit BTR development that’s expected to deliver the first units in 2023’s first quarter.
Kyle McDonough, principal and co-founder at Tower Capital, said, “We are continuing to see demand for single-family and build-to-rent projects across the country. While financing is more complex for BTR development, it is a product type Tower Capital is a proponent of.” The Phoenix-based lender has closed more than $575 million in financing transactions for BTR.
The volatility in the economic markets is creating a need for commercial real estate borrowers to include an experienced and independent mortgage team to close deals today. Investors require financing experts who can move with speed and efficiency, while still bring a deep understanding of capital markets – especially given the rapid shifts and adjustments transactions can face as a closing date approaches. But an often-overlooked aspect of getting deals done is to consider whether both buyer and seller are properly represented in the financing process.
Securing financing for a commercial real estate property can be a complex and time-consuming process. It is challenging for borrowers needing financing for their projects to decide whether to use the capital markets team offered by the same company as the investment sales team or to select an independent structured finance firm to arrange the financing. An independent capital markets team can present the best strategy and options to a buyer along with a strong commitment to get the deal executed.
McCormack Commercial, a Houston-based commercial real estate firm, broke ground on a more than 1.3M SF Class-A industrial park in north Fort Worth.