Tower Capital arranged $14,225,000 in non-recourse construction financing for 19 North, a build-to-rent Townhome community in Phoenix. The community is planned for 96 contemporary styled townhomes that are set within the 19NORTH Transit-Oriented District at the north end of the light rail line along 19th Avenue between Montebello and Dunlap.
“Tower Capital has been closely tracking the ongoing explosion of single-family build-to-rent development projects across Phoenix and we have a compelling build-to-rent pipeline that exceeds $800 million,” said Tower Capital co-founder Kyle McDonough. “This project sits within the overall 19 North corridor, which is an emerging, multigenerational community involving a collaborative partnership between the City of Phoenix, community leaders and stakeholders.”
The 19 North unit mix will consist of one-, two- and three-bedroom townhomes, some with attached garages, which presents a unique and competitive alternative to current apartment rental housing in the area. The gated community features lifestyle amenities such as a large resort-style pool, SOHO house-style great room, multiple flex office spaces, a package room, a pickle ball court and a chef’s kitchen with culinary events.
“This project reflects the burgeoning trend and robust demand for the single-family build-to-rent product,” said Tower Capital’s co-founder Adam Finkel, CCIM. “We expect the growth of this market segment will continue in 2021 and beyond, especially due to shifts in living trends exacerbated by COVID-19.”
A key challenge Tower Capital navigated was the sponsors’ lack of ground-up development experience. That was addressed by highlighting the sponsors’ successful track record in other real estate segments, as well as the restaurant industry.
“Our extensive lending relationships, knowledge and experience in the build-to-rent sector allowed us to provide multiple term sheets acceptable to the sponsor within weeks of being hired,” added Vin Basa, Vice President at Tower Capital.
The site at the NWC of 19th Avenue and Northern is near the Light Rail, Sprouts, and medical offices for Blue Cross Blue Shield and NHW Community Health.
Tower Capital successfully closed more than $400 million in financing transactions in 2020. The commercial real estate lending activity encompassed the acquisition and refinancing of more than 3,200 multifamily units, development capital for 639 single-family build-to-rent units, and senior debt for 760,000 square feet of retail space.
The financing activity in 2020 pushed Tower Capital’s total loan activity to more than $1.2 billion since the independent structured finance firm’s inception in 2015. The company participated in a wide array of debt and equity placements across asset classes including multifamily, single-family rentals, retail, and hotel.