Financing Amount:
Ground Up Development
Phoenix, AZ
Capital Source:
Private Equity
Transaction Details:

Tower Capital arranged the entire capital stack for a Build-to-Rent project in the Phoenix MSA for a new BTR developer.  Tower Capital successfully arranged $21,200,000 in Co-GP Equity, LP Equity and non-recourse construction financing for a 47-unit single-family build-to-rent community in Phoenix, AZ.  The development is located in the rapidly growing Laveen Village submarket, near job centers and the new Loop 202, Phoenix’s newest stretch of freeway.

The subject property will be comprised of 47 single-family homes in a self-contained community on fee simple lots across 14.82 acres, with an average home size of 1,728 square feet.  The community will feature a mix of 3-, 4-, and 5-bedroom homes, attached garages, open floor plans, ample storage, pocket offices, spacious backyards with covered patio, modern elevations, energy star certification and high-speed internet. The units will have premium stone countertops, stainless steel appliances, full-size washer/dryer and upgraded smart-home features & technology.  Each home offers a private backyard with a covered patio.

The primary challenge with arranging capital for a developer beginning a new venture is usually finding a balance sheet to credit enhance the debt portion of the capital stack.  Tower’s deep knowledge of capital providers in the build-to-rent space helped find a Co-GP to contribute both co-investment dollars in addition to their balance sheet to the partnership and didn’t require a co-developer role.  The Co-GP was also flexible with debt requirements and got comfortable with higher leverage debt up to 75% LTC, which was accretive to the project IRR.

Tower Capital has successfully closed more than $750 million in construction financing and joint venture equity for 30 build-to-rent communities and continues to be a leader in the marketplace with another $500 million of projects in the pipeline. The firm’s pipeline of projects spans multiple states including in Arizona, Texas, Alabama, North Carolina, Colorado and Indiana.

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