Raleigh BTR Lands $51M Construction Loan

Turnbridge Equities has received a $51 million construction loan for Mailman Post, a single-family, build-to-rent development in Raleigh, N.C. The non-recourse note was originated through a regional bank in a transaction facilitated by JLL.

This project marks the expansion of Turnbridge’s Research Triangle portfolio into the build-to-rent sector. The 302-unit community will cover a 74-acre site located 15 minutes from downtown Raleigh. Upon completion it will offer two- through five-bedroom homes averaging 1,650 square feet.

Units will be built across two- and three-story buildings. The community will rise at 409 and 438 Mailman Road in Knightdale, N.C.

Horizontal site work on the project began in November and vertical construction is expected to commence in December. Deliveries are anticipated to begin in July of next year with a final completion by year-end of 2026.

Each home will feature a garage, front porch and backyard. Community amenities will include pickleball and bocce courts, a putting green, playing fields, a dog park, tot lots, a resident lounge, coworking spaces and a pool.

Paul Spellman, Chris Peck and Ward Smith led JLL Capital Market’s debt advisory team, representing the borrower.

“Mailman Post demonstrates the growing appeal of build-to-rent communities throughout the Southeast,” Spellman told Multi-Housing News. “We received tremendous interest in this financing given the strong sponsorship, location, and market fundamentals within the Raleigh MSA.”

NC BTR’s strong investor appeal

According to Kevin Hudak, chief research officer at RCKRBX, the pandemic has accelerated the Raleigh-Durham market’s growth, prompting many to relocate from the Northeast to key metropolitan areas across the Sun Belt.

“We have seen a growing demand in the Sun Belt markets for larger living arrangements and an affinity for product with two or more-bedroom configurations, making build-to-rent properties an increasingly attractive option for renters as they ‘size out’ of traditional apartment communities,” Hudak said.

He noted that detached single-family rental homes and townhome rentals in the Raleigh-Durham area meet these preferences, and renters are even increasing their future rent budgets to accommodate these spatial needs and current economic conditions.

Jeff Holzmann, COO of RREAF Holdings, told MHN that his firm has been looking into BTR deals in several North Carolina submarkets, like Raleigh and Charlotte, and has recently acquired some communities in those areas.

“We are seeing an increased demand for BTR product as people look to upgrade from apartments into small homes but are not yet ready to buy,” Holzmann said. “Most educated consumers in the Raleigh area are likely holding off on buying right now to see what happens with borrowing interest rates in the coming months.”

He noted that he is seeing similar high demand for such BTR products in Texas, specifically around the Dallas suburbs, where high-reputation school districts offer quality homes for rent in shorter time frames than building a new home.

In Austin, a BTR community from NexMetro Communities will soon open. Avilla Vista Range, a 150-unit luxury development, is set to debut this month.