Tower Capital, a leading provider of build-to-rent construction financing, has secured $58.4 million in non-recourse construction financing for a 270-unit build-to-rent community in the San Marcos, TX MSA. The community will be situated on approximately 24 acres of land, with a portion of the site dedicated to amenities such as open recreational space and an outdoor walking path. Each home will have an average unit size of 1,047 SF square feet, and will offer some level of private patio or yard space. The greater community will also offer a fitness center, car care station, BBQ grills, a central community pool and leasing clubhouse. The units will feature solid surface quartz countertops, stainless steel appliances, premium kitchen backsplashes, full-size washers and dryers, and upgraded smart-home features and technology.
The property, located in San Marcos, TX, is strategically situated in the heart of the Tech Corridor along I-35, conveniently connecting to major employment hubs and the balance of the San Marcos MSA, along with surrounding markets such as San Antonio and Austin. The property offers convenient access to a diverse range of everyday conveniences, including retail shops, restaurants, healthcare facilities, and entertainment options, all just a short drive away.
The Sponsor is a highly experienced, locally based development firm with substantial track record in the BTR space spanning multiple states including AZ, CO, IN, and TX with plans for further expansion and a robust pipeline set for 2025.
Tower Capital was able to secure the financing via a national debt fund despite persistent challenging market conditions. Many lenders remain on the sidelines as it relates to deploying construction financing, but Tower was able to get lenders comfortable with both the project and Sponsor. As a result, the Tower team was able to capture multiple competitive term sheets for its client and ultimately secure ~70% LTC non-recourse financing at a sub-8% untrended debt yield.
This financing is the latest in a series of successful transactions for Tower Capital in the build-to-rent space and is a testament to their continued growth of market share in the state of Texas specifically. The company has capitalized over $2.3 billion in build-to-rent projects for 49 communities encompassing more than 8,500 units across the country, having closed over $100M in BTR construction financing in the state of Texas in the last 90 days alone with a substantial pipeline behind it.
