Tower Capital Arranges Over $100 Mil in Financing on Four Build-for-Rent Developments

Tower Capital arranged nearly $108 mil in combined financing for four single-family, build-for-rent (BFR) developments in two states. The larger of the transactions involve Empire Group’s development plans in Metro Phoenix for the Village at Paseo de Luces in Tolleson, AZ and Village at The BLVD in Avondale, AZ. Tower Capital also arranged financing for Family Development’s Arise North PHX in Metro Phoenix and arranged financing for a single-family BFR project in Charlotte, North Carolina.

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Special report: Why Valley build-to-rent hybrid homes are capturing the eye of lenders

Renters, homebuilders and investors are in love with the build-to-rent concept, where detached single-family rental homes are built within highly amenitized communities. More lenders are catching on and beginning to offer better deals. Here's what's happening in the Phoenix market.

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Tower Capital Completes Four Multifamily Financings Totaling $21 Million in Arizona

Tower Capital arranged more than $21.3 million in combined acquisition financing for four multifamily properties in Arizona.

The transactions involve the Portofino in Phoenix, the Hayden Apartments in Scottsdale, the Filmore Apartments in Phoenix and the Santa Carolina Apartments in Nogales, AZ.

Tower Capital’s Adam Finkel, CCIM, Principal, said, “The multifamily sector continues to attract strong lender interest, especially in the Metro Phoenix market. Population and business growth over the past 18-months has fueled market activity and demand for affordable workforce housing. The financing will allow the sponsors to achieve their investment objectives in a time- and cost-efficient manner.”

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Table of Experts: Commercial Real Estate

Table of Experts: Commercial Real Estate

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Multifamily Influencers

The multifamily sector could not be having an easier and more fruitful 2021. Rents are climbing, investment sales are proliferating and occupancies are strong. Navigating such an environment, one might think, is an easy prospect and to be sure it is always better to be doing business in flush times. However, it still takes skill and sector knowledge to drive a deal home—some of the qualities we look for as we choose our annual influencers in this space. Other qualities we seek out are around achievements and the impact an individual, team or company has had on the industry. We trust you will agree that the following pages will reflect those attributes

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Sacramento Hotel Purchased for $16MM as Part of Hotel-to-Multifamily Conversion

(EDITOR’S NOTE: According to public records, the asset was sold in August of 2021 for $16 million, or about $121,212 per room. The seller was Manas Hospitality, LLC, which is affiliated with San Diego-based Kalthia Group Hotels. The buyer, MVC MF LLC, is an entity affiliated with Josh Wertlieb of Arizona-based Harc Holdings. As part of its business strategy, the firm seeks to transform hotels into new rental housing.)

Sacramento, CA, October 14, 2021- Tower Capital arranged a $23.2 million acquisition and renovation loan for a 132-key Holiday Inn Express hotel in Sacramento, CA that will be repurposed into a 129-unit, Class B multifamily community. The four-story project was originally built in 1979 and is located at Sacramento’s downtown convention center.

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Phoenix Growth Fuels Multifamily Demand for Five Assets

Combined financing of $24.2 million was recently obtained for five multifamily properties, a hotel and a retail property in Arizona. The transactions involve the 44 May multifamily property in Mesa, the Royal Meridian multifamily in Apache Junction, along with Sunset Ridge apartments, Gran Jardin multifamily property, the Mojave Apartments, a Motel 6 and the Alta Vista Shopping Center, all in Phoenix. Tower Capital arranged the financing.

“Transaction activity remains high across the metro Phoenix market as a result of population expansion and an influx of new businesses, in particular tech companies,” says Adam Finkel, Tower Capital’s principal. “The growth is being fueled by immigration of retirees attracted to the quality of life the market offers as well as middle-class families seeking more affordable housing options than they are finding in more expensive markets.”

Phoenix’s population grew from 1.4 million people in 2010 to 1.6 million in 2020, a rate of 11.2 percent, according to the Census Bureau. This is the fastest rate among America’s biggest cities and Phoenix is now the fifth-biggest city in the United States since the last census.

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Holiday Inn Express Finds New Life as Multifamily

Tower Capital recently arranged a $23.2 million acquisition and renovation loan for a 132-key Holiday Inn Express hotel in Sacramento that will be repurposed into a 129-unit class-B multifamily community. The four-story project was originally built in 1979 and is located at Sacramento’s downtown convention center.

“The sponsor’s conversion strategy aligns with Tower Capital’s objective of providing capital to commercial real estate investors who specialize in transforming underperforming hotels into attainable rental housing,” said Adam S. Finkel, principal and co-founder of Phoenix-based Tower Capital. “The sponsor has completed several hotel-to-multifamily conversions, capitalizing on the need for more workforce housing in infill locations which have a high level of demand and are located in desirable locations with rising property values.”

The sponsor plans to complete construction and convert all the units in a 12-month time-period. Additionally, leasing is scheduled to begin as soon as month 10. The unit mix will consist of 74 studio units, nine one-bedroom units and 46 two-bedroom units. Renovations will include the addition of kitchens and washer/dryers as well as improvements such as fixtures and countertops.

Tower Capital’s non-recourse loan provides the borrower with a 36-month term at 85 percent loan-to-cost and includes funds for capital improvements. The loan was closed with a California-based debt fund with which Tower Capital has completed more than $62 million in financing transactions through August 2021.

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Tower Capital Completes Six Financings Totaling $24 Million in Metro Phoenix

Tower Capital arranged $24.2 million in combined financing for five multifamily properties, a hotel, and a retail property in Arizona.

The transactions involve the Sunset Ridge apartments in Phoenix, Gran Jardin multifamily property in Phoenix, the Mojave Apartments in Phoenix, the 44 May multifamily property in Mesa, the Royal Meridian multifamily in Apache Junction, a Motel 6 in Phoenix, and the Alta Vista Shopping Center in Phoenix.

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NexMetro sells another Valley build-to-rent community as property values soar

The wildly popular build-to-rent sector continues to surge in metro Phoenix, as one of the first companies to get into this space has sold another property — and bringing in more than double the value of its first property sale in 2018.

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