Category: News
Sunstone Two Tree Closes on 384-Unit Multifamily Property in Houston
Will invest $10.5 million to fully renovate and modernize the “Villas Del Paseo” community
Westlake Village, California, USA (February 1, 2023) – Sunstone Two Tree
, a developer and operator of rental housing communities in high-growth markets throughout the United States, today announced that it has acquired a 384-unit multifamily apartment property in Houston, Texas, with plans to fully renovate the community. The company purchased the property, located on Elmside Dr. in the Westchase neighborhood of Houston, Texas for $28.9M and will spend $10.5 million on upgrades. Sunstone Two Tree is handling the construction, which has already started, with an anticipated completion date in 2025.
“Houston continues to experience strong job and population growth as evidenced by ranking fifth in the nation in terms of relocations from other cities. Despite construction in recent years, demand has kept vacancies below ten percent in the market,” said Scott Maddux, President of Sunstone Two Tree. “Workforce rental housing appeals to the largest segment of today’s renter market and has proven to be extremely resilient, even during periods of economic uncertainty. We’re pleased to continue our work in Houston to bring high-quality, comfortable, safe and attainable housing to the area.”
The Villas Del Paseo community was built in 1978 and has received few improvements over the years. Sunstone Two Tree will manage a top-to-bottom upgrade of the asset, renovating the interiors of all 384 units with high-quality flooring, hard-surface counters, updated lighting, stainless steel appliances and new cabinetry. On the exterior, it will invest in new paint, do a full roof replacement, add/enhance exterior lighting, improve the landscaping and signage, and repair the balconies and parking lot. It will also update the clubhouse and pool and add dog parks and barbeque areas. The renovations will take place in two phases. The first will include the 144 units east of Elmside Drive, with the remaining 240 being completed in phase two.
Villas Del Paseo is well-positioned to serve the workforce housing community in Houston. It is conveniently located in Westchase, 13 miles from Downton Houston and 20 miles from the William P. Hobby Airport. It is 9 miles from the Energy Corridor, 4 miles from the Memorial City Mall and 3.5 Miles from the Memorial Hermann Hospital. It is also close to the headquarters of several major employers in the area.
Sunstone Two Tree purchased Villas Del Paseo from Comunidad Partners, which has managed the property since 2019. Matt Saunders with Newmark represented the seller. In addition to the Villas del Paseo community, Sunstone Two Tree owns Commons at Westchase, a 282-unit property located 1.3 miles west of Villas Del Paseo, on which it executed a value-add business plan. The company also acquired Village at Westchase, a 462-unit value-add property in 2016, which it sold in April 2022.
Capital Square and Sunstone Two Tree Begin Construction on Single-Family Build-For-Rent Community Near Phoenix
Capital Square, one of the nation’s leading sponsors of tax-advantaged real estate investments and an active developer and manager of housing communities, and Sunstone Two Tree, a developer and operator of rental housing communities in high-growth markets throughout the United States, today announced that they have broken ground on a new build-for-rent community in Glendale, Arizona. The 29-acre lot in the Phoenix suburb will become Ironwood Homes at Rosefield and feature 320 single-family rental homes and plenty of amenities. The new build-for-rent community promises to combine many of the benefits of single-family living – larger units, dedicated parking and private yards – with the advantages and convenience of renting. The property is projected to open later summer 2025.
“Capital Square is pleased to break ground on the development of a single-family rental community in Glendale,” said Louis Rogers, founder and co-chief executive officer of Capital Square. “This Southwestern market is a job engine with record-setting rent growth in recent years and a shortage of single-family homes.”
Development of the project is being primarily funded with proceeds from Capital Square Glendale BFR, LLC, a project-specific limited liability company that is currently raising approximately $49 million in equity from accredited investors.
The partnership closed on the lot at the southeast corner of Northern Parkway and N. Sarival Avenue in September 2023. The 320-unit community will include 102 detached single-family homes, averaging 1,655 square feet, and 218 townhomes averaging 1,257 square feet. Each home will be well-designed, with two stories, direct garage access and a private yard. The community will boast amenities including a pool, spa, fitness center, parks, BBQs, gated entry and sports courts. The lot is conveniently located, with easy access to downtown Phoenix, Sky Harbor Airport, freeways, shopping centers, schools and employers. It is also in close proximity to the dining, retail and entertainment options at The Village at Prasada, a recently opened outdoor shopping center, and Desert Diamond Casino which is currently under construction.
“Given today’s challenging capital markets environment, we are especially pleased to close on this well-located property and begin construction within such a short amount of time,” said Scott Maddux, president of Sunstone Two Tree. “High interest rates are making it one of the worst times for consumers to buy a home, so we believe our unique rental product will provide an attractive value proposition to future tenants. With a proven track record in real estate ventures, Capital Square is an important partner of ours and we are pleased to collaborate with them to bring this much needed, best-in-class rental housing to Phoenix.”
“Greater Phoenix, the tenth largest metropolitan area in the nation, has experienced a shortage of high-quality single-family rental options due to significant population growth that has far exceeded the pace of housing development in recent years,” said Whitson Huffman, co-chief executive officer. “Glendale BFR provides investors an attractive opportunity to expand their portfolio into a high-growth Southwest market with an experienced team of developers, while also working to alleviate the single-family rental housing shortage.”
Since its formation in 2012, Capital Square has raised more than $3 billion in equity from investors for its tax-advantaged real estate investment offerings. The company has consistently ranked as one of the leading sponsors of Delaware statutory trust (DST) investment programs for investors seeking the advantages of Internal Revenue Code Section 1031 exchanges and is also an active sponsor of qualified opportunity zone funds, development LLC’s and Capital Square Apartment REIT, a real estate investment trust that invests in multifamily communities throughout the Southeast.
Sunstone Two Tree has nine build-for-rent communities in various stages of development in Arizona, totaling 1,500 units. The developments are a key part of the company’s commitment to create high-quality, attainable living spaces to address the critical shortage of entry-level homes. In addition to its work in Phoenix, Sunstone Two Tree has acquired or developed thousands of rental units across the country.
KTAR: New build-to-rent luxury community opens in Avondale
Multi-Family Dive: Sunstone Two Tree gets approval for 3 projects in Phoenix
Sunstone Two Tree to Develop Three New Build-to-Rent Communities in Arizona
Developments represent a $195mm total investment and add over 550 high-quality, attainable single-family rental units to the Phoenix market
Westlake Village, California, USA, September 26, 2023 – Sunstone Two Tree, a developer and operator of rental housing communities in high-growth markets throughout the United States, today announced plans to develop three new build-to-rent (BTR) communities in Arizona. The three communities will add more than 550 single-family rental homes to the Phoenix metropolitan area. Sunstone Two Tree now has nine BTR communities totaling close to 1,500 units in various stages of development in the state and remains committed to creating high-quality, attainable living spaces to address the critical shortage of entry-level homes.
“The current economic situation is not only pushing homeownership further out of reach for so many individuals and families, but it is making it even more difficult for developers and builders to add much-needed inventory to the market,” said Scott Maddux, President of Sunstone Two Tree. “We are pleased to start these three new projects despite significant headwinds in the current economic environment. These communities combine the benefits of single-family living (larger units, dedicated parking, private yard space) with the advantages of renting (flexibility, amenities and minimal maintenance responsibilities). The combination of those two qualities really serves to meet the evolving demands of today’s residents.”
Sunstone Two Tree has closed on a 29-acre lot at the southeast corner of Northern Parkway and N. Sarival Avenue in Glendale, Arizona which it will develop with its partner, Capital Square. The 320-unit community will include 102 detached single-family homes, averaging 1,655 square feet, and 218 townhomes averaging 1,257 square feet. Each home will have two stories, direct garage access and a private yard, with many community amenities including a pool, spa, fitness center, parks, BBQs, gated entry and sports courts. Construction is expected to begin October 2023.
Capital Square and Sunstone Two Tree, each with a proven track record of successful real estate ventures, are pooling their resources, expertise, and networks to develop best-in-class rental housing in high-growth markets. Their complementary skillsets and shared vision promise a strategic synergy that will drive innovation and excellence in real estate development.
In addition to the Northern Parkway project, Sunstone Two Tree has received approvals and recently started construction on two other BTR communities in the Phoenix area. On a 7.64 acre lot located at the southeast corner of N. 99th Avene and W. Van Buren Street in Tolleson, Arizona, the company will develop a community of 143 three-bedroom, two story townhomes. They will average 1,350 square feet and each have a two-car garage and private backyard. The company has also received approvals for a build-to-rent community on the northwest corner of S. 91st Ave and W. Lower Buckeye Road in Phoenix. The 5.64 acre lot will become a community of 88 three-bedroom townhomes with attached, two-car garages and private backyards. Amenities at both communities will include pickleball courts, parks, playgrounds and a dog run, clubhouse, pool fitness center and tot lots.
Each of the three communities is conveniently located, with easy access to downtown Phoenix, Sky Harbor Airport, freeways, shopping centers, schools and employers. All of them will be professionally managed and well-maintained by best-in-class on-site property management companies.
Sunstone Two Tree is a developer and operator of rental housing in high growth markets in the United States. Overall, the company has acquired or developed thousands of rental units across the country.
For more information, visit https://sunstonetwotree.com/.
About Sunstone Two Tree
Sunstone Two Tree is a vertically integrated real estate operator and developer focused on rental housing in high growth markets throughout the United States. Sunstone Two Tree was formed in 2023 as a result of the merger between Sunstone Properties Trust, an owner, operator and fund manager founded in 2012 with deep expertise and a successful track record in multifamily investments, and Two Tree Capital, an acquirer and developer of multi-family build-to-rent (BTR) communities.
Sunstone Two Tree acquires, renovates and manages existing multifamily assets while developing dedicated single-family rental communities. Sunstone Two Tree is based in Westlake Village, CA is driven by a two-fold mission: 1) to protect investor capital and deliver compelling returns through every phase of the economic cycle and 2) to create and operate safe, clean, and well-maintained rental communities for individuals and families.
About Capital Square
Capital Square is a vertically integrated national real estate firm specializing in tax-advantaged real estate investments, including Delaware statutory trusts for Section 1031 exchanges, qualified opportunity zone funds for tax deferral and exclusion and a real estate investment trust (REIT). In recent years the company has become an active developer of mixed-use multifamily properties in the southeastern U.S., with eight current projects totaling approximately 2,000 apartment units with a total development cost in excess of $600 million. Since 2012, Capital Square has completed more than $7.5 billion in transaction volume. Capital Square’s related entities provide a range of services, including due diligence, acquisition, loan sourcing, property/asset management and disposition, for a growing number of high-net-worth investors, private equity firms, family offices and institutional investors. Since 2017, Capital Square has been recognized by Inc. 5000 as one of the fastest growing companies in the nation for seven consecutive years. To learn more, visit www.CapitalSq.com.
Phoenix Business Journal: Build-to-rent developers plan hundreds more West Valley units amid housing shortage (Paywall)
Tanner Maddux Recognized by Connect CRE’s 2023 Next Generation Awards
Connect Media has named our Chief Investment Officer Tanner Maddux to its 2023 list of Rising Stars. He was named as one of ten national honorees for his accomplishments in the commercial real estate industry. For the list of National honorees, visit:
https://www.connectcre.com/awards/2023-annual-next-generation-awards/national/
Firms Merge to Focus on Build-to-Rent Sector
Two Tree Capital Hires Homebuilding Veteran Tyson Williams to Accelerate Development of Build-to-Rent Portfolio
Two Tree Capital (“Two Tree”), an acquirer and developer of single-family rental home communities, today announced that it has appointed Tyson Williams as Director of Construction to help accelerate the growth of its build-to-rent (BTR) portfolio. Mr. Williams brings over 18 years of residential homebuilding experience at multiple private and publicly-owned homebuilding companies including American Homes 4 Rent, Ryland Homes, CalAtlantic Homes and Century Communities to the role. In this position, he will be responsible for overseeing all construction operations for Two Tree Capital’s growing portfolio of BTR communities located across Phoenix, Arizona; Las Vegas, Nevada and Denver, Colorado.
“With a 2,000 home pipeline and an experienced team in place, Two Tree is well-positioned to capture the growth opportunity that the BTR sector presents,” said Scott Maddux, Co-Founder and CEO of Two Tree Capital. “Our communities provide an important housing solution for many households – from millennials looking for more space to baby boomers hoping to downsize, particularly as homeownership becomes increasingly out of reach for so many. Tyson is a proven homebuilding professional and leader with specific BTR experience who will help ensure our communities get built on time and on budget. We could not be more pleased to welcome him at this exciting time for the company and our industry.”
Most recently, Williams served as Regional Vice President of Operations for American Homes 4 Rent, where he developed 2,900 lots from 2019-2022 across Arizona, Colorado, Idaho, Texas, Nevada, Utah and Washington. In this position, he also helped build and oversee the purchasing and construction teams for the company’s horizontal and vertical communities. Prior to American Homes 4 Rent, Williams served as Vice President of Operations for Century Communities and CalAtlantic Homes. He also held various manager-level positions at Ryland Homes (now CalAtlantic Homes).
“Two Tree Capital’s management team uniquely combines institutional experience with an entrepreneurial drive to address the critical need for entry-level homes throughout the United States,” said Williams. “I have spent the last several years in the BTR space and have seen first-hand how demand for these communities continues to grow as the sector combines the benefits of single-family living with the flexibility of renting. I could not be more pleased to join the Two Tree team in bringing their excellent BTR communities to life.”
Williams joins other recent additions to the Two Tree management team, including Jonathan Sweet, Director of Land Acquisition, a 40-year industry veteran who specializes in acquiring and developing land. Mr. Sweet has been directly involved in acquiring and developing over 40,000 residential units over the course of his career and joined Two Tree from American Homes 4 Rent, where he was Vice President of Land Acquisition across Arizona, Colorado, Idaho, Nevada, Utah and Washington. Joshua Binkley joined Two Tree as Director of Development to oversee all of the company’s pre-development activities. Prior to Two Tree, he worked for Kornwasser Properties and Douglas Emmett where he managed construction and development projects from nearly every real estate asset class.
Headquartered in Westlake Village, California, Two Tree Capital has a 2,000 home pipeline in various stages of development in high-growth markets across the United States.
To learn more about Two Tree Capital, visit https://www.twotreecapital.com/
About Two Tree Capital
Two Tree Capital is addressing the critical need for entry-level housing throughout the United States by developing communities of single-family rental homes, also known as “build-to-rent” (BTR) communities in high-growth markets across the country. Two Tree’s portfolio offers residents many of the benefits of single-family living with the flexibility, amenities and minimal maintenance responsibilities of renting. The company has a 2,000 home pipeline in various stages of development in high-growth markets across the United States.
Media Contact:
media@twotreecapital.com