Tower Capital, one of the nation’s leading structured finance firms in the commercial real estate lending space, arranged $88.5 million in construction financing for a Build-to-Rent (BTR) community in the Phoenix market. The financing is for Village at Bronco Trail, a 354-unit project planned for development by Scottsdale-based Empire Group. Tower Capital’s Kyle McDonough, Principal and Co-Founder, along with George Maravilla, Senior Vice President, arranged the financing.
“The BTR market continues to experience strong growth and demand from the lending community as single-family residential home sales volume declines because of rising mortgage rates and limited inventory,” said McDonough. “Last year was the strongest year on record for construction of BTR’s, and we expect more of the same in 2023. Our pipeline of BTR financings certainly reflects that trend, as we have closed nearly $210 million in BTR financing this past month and have roughly $300 million more in the works to close this summer.”
The roughly 30-acre Village at Bronco Trail site at 29th Ave. at Sonoran Desert Dr. is slated for first deliveries in 2024. The project will feature average unit sizes of 920 square feet. The community is planned to include detached garages, a dog-park, a BBQ grill, resort-style pool, clubhouse and common area open space. The units will have solid surface quartz countertops, stainless steel appliances, premium kitchen back splashes, full-size washers/dryers, and upgraded smart-home features and technology. Each home offers a private yard.
The development is located in the rapidly growing North Phoenix submarket, less than two miles from the $40-billion chip manufacturing plant under development for Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest manufacturer of semiconductor chips.
In early June, Tower Capital arranged $120.5 million in combined financing for two other Phoenix-area BTR projects by Empire. They included Village at Pioneer Park, a newly constructed 332-unit Build-to-Rent community, as well as Village at Skyline Ranch, a 167-unit BTR currently under development.
Maravilla notes, “Interest in BTR communities remains strong, both from renter demand and investor perspectives. Uncertainty in the overall economy and capital markets stemming from the Federal Reserve’s interest rate hikes has caused lenders to be more cautious and selective. Our team at Tower Capital brings extensive experience with this product type and was able to get lenders comfortable with the Village at Bronco Trail project financing and secure multiple term sheets despite the market conditions.”
