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Tower Capital Arranges $100 Mil in Construction Financing for Two Sunbelt BTR Developments

1/28/25

Tower Capital arranged nearly $100 mil in construction financing for the development of two build-to-rent (BTR) communities in Phoenix and Dallas, on behalf of two separate borrowers. Tower Capital’s Kyle McDonough, George Maravilla, David Stull and Noah Schott arranged the transactions.

3959 W. Hunt Hwy, San Tan Valley, AZ
3959 W. Hunt Hwy, San Tan Valley, AZ
The larger of the two projects is Village at Borgata, a 287-unit BTR community being developed by the Empire Group of Companies in Phoenix’s Queen Creek submarket. Tower Capital arranged $70.25 mil in non-recourse construction financing via a debt fund.

The community will be situated on roughly 27 acres of land at 3959 W. Hunt Hwy in San Tan Valley, with a portion of the site dedicated to amenities such as open recreational space, fitness center, leasing clubhouse, dog parks, and an outdoor walking path. Each home at Village at Borgata will have an average unit size of 960 sf and will offer some level of private patio or yard space in addition to smart home technology packages.

The units at Village at Borgata will feature solid surface quartz countertops, stainless steel appliances, premium kitchen backsplashes, full-size washers and dryers, and upgraded smart-home features and technology. The site is located near the LG battery plant in Queen Creek, which is set to bring thousands of jobs to the immediate area and serve as a significant economic driver for the entire Phoenix MSA. Village at Borgata will provide much-needed housing for the future employment base for LG and its related businesses.

According to Maravilla, the non-recourse construction loan was structured with multiple attractive features including a rate burn down and an earn out. The rate burn down allows the sponsor to lower their interest rate spread at final certificate of occupancy and the earn out allows the sponsor to draw incremental proceeds from the loan once construction is complete. These features allow the sponsor to lower project capital expense and increase project returns.

The second transaction involves $29.5 mil in non-recourse construction financing for a 118-unit build-to-rent townhome community being developed by a Dallas-based multifamily and BTR/SFR development and investment firm. The community will be situated on roughly 15.5 acres of land, with a portion of the site dedicated to amenities such as open recreational space and an outdoor walking path. The site is situated in Melissa, TX just north of Dallas proper, immediately off Sam Rayburn Highway (SH-121), and within a short distance of US-75.

Each home will have an average unit size of 1.7k sf and will offer private patios or yard space. The overall 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 three-bedroom units with attached garages and dense amenity base are expected to appeal to an array of potential residents.




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