Tower Capital Refinances BTRs in North Phoenix
First deliveries at the 354-home community are expected this fall.
Tower Capital has provided a $79.5 million refinancing for the Village at Bronco Trail, a 354-unit build-to-rent community in North Phoenix.
Empire Group, based in Scottsdale, Ariz., sponsored the loan.
The 354-unit Village at Bronco Trail covers about 30 acres at 29th Avenue at Sonoran Desert Drive. First deliveries are scheduled for this fall. Construction on the project began in 2023.
The development is near Hyperion Technologies’ $1.5 billion manufacturing plant, Taiwan Semiconductor Manufacturing Co.’s $165 billion chip manufacturing plant, and a $2 billion production facility for Amkor Technologies.
The nonrecourse construction financing was originated by Tower Capital’s Kyle McDonough, managing partner & co-founder; George Maravilla, partner; David Stull, vice president; and Noah Schott, capital adviser.
The influx of capital into BTR projects may lead to the construction of more rental homes, which could alleviate housing shortages in many areas, according to Doug Ressler, a manager with Yardi Matrix.
“Overall, the recapitalization of BTR financing is poised to improve housing availability, affordability and community development significantly,” he told MHN.
NexMetro adds BTR in DFW
This week, NexMetro Communities opened its 16th community in the Dallas-Fort Worth area. Avilla Railhead in Cleburne, Texas, a 211-unit property, brings NexMetro’s DFW portfolio to 2,750 homes built since entering the market in 2017.
NexMetro recapitalized and refinanced two Texas projects earlier this year.
“BTR benefits from favorable market fundamentals that lead to superior revenue growth, and this recap allows for the upside of executing longer-term business partnerships,” NexMetro CEO Josh Hartmann told MHN.
JLL Capital Markets arranged a recapitalization of eight NexMetro assets in February. Stockbridge invested $65.9 million of preferred equity along with existing assumable agency financing of $206 million.
Previously, a finance pool worth $78.7 million in equity (via Artemis) and $160 million of senior debt (via Blackstone) worked across four build-to-rent assets in Arizona and Colorado.
The combined portfolio was valued at $620 million, with $145 million of equity committed and $366 million of senior debt.
A ‘burgeoning’ sector
BTR remains a burgeoning sector, according to Malcolm Davies, founder & CEO of WAY Capital.
Davies’ firm closed over $500 million in BTR financings in the past 12 months. Four were refinances of construction loans in Phoenix and Tucson, totaling over $330 million worth of refinance proceeds.
WAY’s most recent BTR financing was an $88.2 million construction loan on behalf of LaTerra Development and California-based single-family office RevOz in Albuquerque for a 344-unit ground-up project.
“Nationally, the quantity of BTR communities in lease-up is peaking in mid-2025 and will decline through 2026,” Matthew Putterman, managing director & single family rental leader with JLL, told MHN.
“Many of those communities will ultimately stabilize and sell. But in the interim, the capital markets have been incredibly accommodating to refinancing and recapitalizations, which provide developers and owners time to optimize their rents and operations for a future sale.”
