Tower Capital (“Tower”) successfully arranged non-recourse construction financing for a build-to-rent multifamily community totaling $20,090,000. The subject property spans 7.02 acres and consists of 84 luxury units featuring two-bedroom carriage units and three-bedroom townhome units. The community offers residents high quality amenities including a resort style swimming pool and spa, ramada, BBQ grills, and a game lawn. Some units will be carriage units and while the others will be duplex and triplex townhome units with private backyards and dog doors. The property will also feature 27 detached single-bay garages that can be rented on a monthly basis for an additional premium. The units will feature private entrances, private backyards, hard surfaced countertops, full size washer and dryers, stainless steel appliances, 10-foot ceilings and smart home technology packages.
The financing of this asset had multiple challenges. This will be the developers first construction project self-performing the construction through its general contractor. In addition, the GC is newly-formed and this will be the GC’s first construction project. Tower utilized the clients past experience to build a story that ultimately the lender was comfortable with.
The project also has a timing issue regarding a land conveyance. Given Tower’s in-depth knowledge of the development process, we were able to brainstorm a solution that the ultimate lender was comfortable with.
Despite the above complication, Tower was able to create a competitive environment and produce multiple quotes allowing our client to make an informed decision and have confidence that they are getting the best terms.
The site is located in Phoenix, AZ where housing demand continues to far outpace demand. It is close to nearby job centers and only one block from a picturesque mountain reserve that boast more than 50 miles of trails for hiking, horseback riding and mountain biking for residents to enjoy. This build-to-rent development will be our client’s third community in their pipeline.
