Tower Capital, a leading provider of build-to-rent construction financing, secured $29.5 million in non-recourse construction financing for a 118-unit build-to-rent townhome community in the Dallas MSA. The community will be situated on approximately 15.5 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 1,655 square feet, and will offer some level of private patio or yard space. The greater community will also offer a swimming pool, clubhouse, fitness center, BBQ area, playground, and pickleball courts. In-unit features consist of LVP flooring, solid surface counters, stainless steel appliances, recessed lighting, flat pane cabinets, large windows, two-car attached garages, smart home tech, and EV chargers. The spacious 3-bedroom units with attached garages and dense amenity base will attract a multitude of potential residents to the project.
The subject property is situated immediately off Sam Rayburn Highway (SH-121) and within a short distance of US-75. Due to its proximity to Dallas and other key surrounding submarkets experiencing significant job growth and net migration, Melissa is in the heart of one of the fastest growing counties in the nation that has experienced a nearly tenfold increase in population in the past 20 years, and is expected to grow 11.0% over the next 5 years, outpacing the forecasted growth of 4% for the Dallas market as a whole.
The Sponsorship group is an established local investment firm with a strong presence in the North Dallas area through the development and investment in a range of multifamily properties, including apartments and townhomes. The Sponsor has participated in transactions spanning more than 2,400 units, with acquisitions exceeding $380 million in Texas, Florida and Georgia. The non-recourse financing arranged by the Tower Capital team provided the Sponsor with pricing well inside of the competitive set with an attractive floor rate, allowing the Sponsor to benefit in accordance with the downward trajectory of one month term SOFR throughout the construction period.
Tower Capital was able to secure the financing despite persistent challenging market conditions. Many lenders halted funding construction loans in recent months as the end of year approached, but Tower was able to get lenders comfortable with the project financing and secure multiple competitive term sheets.
This financing is the latest in a series of successful transactions for Tower Capital in the build-to-rent space. The company has closed approximately $2.0 billion in build-to-rent construction financing and joint venture equity for 44 communities encompassing more than 8,000 units across the country.
