Single-Family Build-to-Rent Community
- Capital Source: Debt Fund
- Purpose of Loan: Construction Financing
- Loan Amount: $27,800,000
- LTV: 80%
- Rate: 5.60%
- Term: 36 Months + One (6) Month Extension
- Amortization: Interest Only
- Prepayment: None
- Recourse: Non-Recourse
Tower Capital (“Tower”) successfully arranged non-recourse construction financing for a build-to-rent Multifamily community totaling $27,800,00. The subject property spans 13.2 acres and consists of 128 luxury units featuring 1, 2 & 3 bedroom units. The community offers residents high quality amenities including a sparking resort style swimming pool and spa, fitness center, BBQ grills, a bocce ball court, playground, and dog park with a dog washing station. Some units will be detached, while some will be duplex units with a mix of 1-story and 2-story units. A portion of the units will have an attached 1-car or 2-car garage. The units will feature private entrances, private backyards, granite countertops, stainless steel appliances, and 10’ ceilings.
The financing of this asset was challenging since the developer had already started construction prior to the loan closing causing a broken priority of title. Despite the complication, Tower was able to identify a lender and a title company that was comfortable with the sponsorship and the risk of insuring the property. The 80% LTC loan secured by Tower Capital allowed the client to finish the horizontal improvements and fund 100% of the vertical improvements.
The site is located in McKinney, TX, a highly desirable city within the Dallas MSA. McKinney is the third fastest growing city in the country. The subject property is close to major retail, entertainment and employment centers such as Raytheon which employ 3,000 people in McKinney. This build-to-rent development will be our client’s 1st community in their pipeline.
The SFR/BTR fundamentals have continued to accelerate due to heavy demand driven by household formations, net migration, and COVID-related shifts, such as remote work. The average rental rate of single-family properties is 18.7% higher than the average rent for conventional apartments. Based on the Subject’s location, the local housing market, expected renter growth, and favorable demographics trends, the Subject offers a good opportunity for a community of single family rental homes.
About Tower Capital:
Tower Capital was founded to enable owners of commercial real estate to achieve their investment goals with the least amount of time, energy, and cost, while creating surety of execution and peace of mind.
Established in 2015 and headquartered in Phoenix, Arizona, Tower Capital provides customized structured financing to investors throughout the United States. We specialize in debt and equity placement ranging from $2 Million to $300 Million and have financed over $2 Billion for our clients since inception. We focus on independent financial advising with an entrepreneurial mindset, market vigilance and personalized attention to every client.