GreenLake Provides $100M Construction Loan for Phoenix Community

GreenLake Asset Management has provided more than $100 million in construction financing for an undisclosed borrower’s 276-unit build-to-rent project in the Phoenix metro. The firm closed on a $41.3 million loan in March for the property’s first phase and, more recently, completed a $59.3 million loan for the project’s second phase.

The borrower has already started construction on the first phase, which will construct 94 townhome units, a clubhouse and leasing office. As the developer broke ground on the first phase, it was able to finalize the financing for the second phase, which will add 182 additional townhome units. According to GreenLake, the entire project is expected to be complete in summer 2024.

Once completed, the community will offer one-, two- and three-bedroom units, which will be built with high ceilings, private outdoor areas and attached parking. The project is being built on a former golf course located in North-Central Phoenix.

According to Marcus & Millichap’s third quarter report on the Phoenix multifamily market for 2023, the metro’s housing inventory is expected to grow by 4.5 percent for the year, marking a new all-time high. The year already saw 9,000 units added to Phoenix’s housing stock so far, but 54,000 additional units are currently planned or underway as of August. The report also noted that multifamily demand in the metro has outperformed the national scale, with approximately 6,730 units being absorbed on net over the first half of 2023.

Growing demand for rentals

Peter Chang, managing principal at GreenLake, said in prepared remarks that the region has consistently landed at the top of the list when it comes to rising home prices in recent years. Chang also said in prepared remarks that potential homeowners are choosing to keep renting because of high interest rates.

GreenLake provides short-term commercial bridge loans to a variety of projects across the U.S. Last month, the firm provided a more than $35 million construction loan to the KeeTown Loop development in Waukee, Iowa.