Tower Capital arranges $27.8 million construction financing for Texas BTR

McKinney, TX Tower Capital arranged $27.8 million in non-recourse construction financing for a build-to-rent multifamily community. The 13.2-acre property is located at 2703 Rockhill Rd. and will house a 128-unit development that is expected to deliver in Q1 2023. The financing arranged by Tower Capital allows Hanson Capital Group to finish the horizontal improvements and fund the vertical improvements.  

Scottsdale, AZ-based Hanson Capital’s Chris Hanson said, “We own a portfolio of both multifamily and industrial projects in the Dallas-Fort Worth market, but this will be our first out-of-the ground, build-to-rent multifamily development. We acquired the land in 2019 and subsequently secured entitlements, as well as built the infrastructure for this project. That allowed us to leverage our equity position to obtain construction capital to move forward now. We looked to Tower Capital for the funding because they are leaders for debt in the BTR space.”

Tower Capital’s Kyle McDonough, principal and co-founder, said, “Fundamentals for the single-family build-to-rent sector has continued to accelerate due to heavy demand driven by household formations, net migration, and COVID-related shifts, such as remote work. The average rental rate of single-family properties is 18.7% higher than the average rent for conventional apartments. Additionally, based on the property’s location, the local housing market, expected renter growth, and favorable demographic trends, the market offers a tremendous opportunity for the development of a community of single-family rental homes.”

The project will feature one to three bedrooms ranging in size from 833 s/f to 1,621 s/f, a resort style pool and spa, fitness center, paseo with shade structures, BBQ grills, a bocce ball court, a playground, a dog park and dog wash. The units will feature private entrances, private backyards, granite countertops, stainless steel appliances, and 10-foot ceilings.

Hanson said, “We are big believers in the BTR sector because the detached single-family-style multifamily product can serve the needs of wide variety of people, from young, pre-first-time home buyers, to empty nesters, and all segments in between. BTR projects can have large yards and offer residents the flexibility to have pets, yet they don’t need to sacrifice the amenities of a luxury residential community. Residents like having everything found in a single-family type of home, though appreciate that there is a maintenance staff to take care of the property.”