How we finance Single-Family Build-to-Rent Communities
This community is at the forefront of the new and rapidly growing asset class called Single-Family Build-to-Rent. The asset class is uniquely positioned between multifamily and single-family to provide a lifestyle for people who desire the privacy and backyard offered by single-family living. The asset class also appeals to renters who have grown accustomed to living independently and are looking to downsize in space from larger single-family homes often requiring more maintenance and upkeep.
Tower Capital provides a wide array of diverse solutions to best fit the developers goals and objectives for Single-Family Build-to-Rent and Built-for-Rent financing. Having arranged financing for approximately $200M in build to rent transactions, Tower Capital is well-versed in the list of specific capital providers that are currently active in the build for rent space. The professionals at Tower Capital understand each lenders’ specific hot buttons and underwriting criteria so that the loan request package can be tailored accordingly in order to maximize the results on behalf of their clients.
Tower Capital has financed all stages of the build-to-rent project lifecycle, including land acquisition (entitlements/zoning, design & pre-development), construction financing, pre-stabilization bridge financing (during or after construction during lease up) and permanent financing (fully leased and stabilized operations). Tower Capital has also financed different parts of the capital stack for build to rent projects including senior loans, mezzanine loans, preferred equity and joint venture equity (Co-GP & LP) and multiple situations including low and high leverage senior loans, recourse and non-recourse financing.
Single-family rental communities or build-to-rent communities are the reinvention and reimagined and improved low-density apartments that were built back in the 1980’s. They were initially built out of circumstance, the need for more affordable rental housing necessitated by the Great Recession, and quickly evolved into a widely adopted way to live by consumers from different demographics. As a result, it has become one of the most desirable asset classes by developers and capital providers in commercial real estate.
Because of its relative newness, the industry has yet to adopt a single name for the asset class, often referred to as any one of the following: build-to-rent (B2R), build-for-rent (BFR), horizontal apartments, single-family rental communities.