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Author: btinvest

Categories2015

Macroeconomics Outlook 2015 Q3

By btinvest,

Macroeconomics Outlook 2015 Q3

Sree Annavarapu slept in a tent all night on September 28th. Despite being six months pregnant with her first child, Sree camped out so that she could snag a corner lot in the Prestwyck development in McKinney, a booming town 35 miles north of Dallas. She was not the only one. All 83 lots in the development sold within 12hrs.           

We don’t have tents outside of our offices (yet), but our long waiting list of tenants confirms our long held thesis that residential property shortage, in the US and especially the Dallas-Fort Worth Metroplex (DFW), is worsening. DFW median home prices increased 8% in August (year over year) while rent surveys by Zillow, RentRange and Zumper showed that rents soared between 5-14% in the same period, far above the roughly 2% inflation rate in the US. We expect that the residential property shortage in DFW, caused by insufficient new home construction in the past decade, will persist until at least 2018.

Macroeconomics Outlook

The most anticipated Fed meeting in the last two years ended with a whimper in September. The Fed, as we expected, kept rates at zero. Fed Chair Yellen cited recent global economic and financial turmoil and subdued US inflation as the twin forces that pushed back the rate increase.

Taking Yellen’s logic further, we expect the Fed to raise rates in the next 12 months, but will keep rates below 1% until the end of 2016. We are predicting minimal impact on the economy and the markets, with the high-likelihood of a short-term correction, but nothing more.

Globally, China’s economic slowdown has claimed numerous victims, from Canada and Australia, to Chile and the rest of Latin America. Europe and Japan are no help, drowning in their own demographic and debt-fueled crisis. US will continue to muddle along at 2% GDP growth.

Despite the uncertainties, we are actually quite optimistic here at Bridge Tower. The US economy is adding jobs. The price of gas at $2.25 per gallon is giving consumers extra spending power. Low interest rates are keeping homes affordable in large parts of the country. Combined, these factors are contributing to an uptick in new household formation. Yes, millennials, armed with new jobs and a car, are finally venturing out from their parents’ basement.

Taken together, we continue to see mortgage rates hovering below 4.5% in the next 12 months and home price appreciation outpacing inflation nationwide.

Outlook for the Dallas-Fort Worth Market

DFW homebuilders went into overdrive in the third quarter, trying valiantly to catch up from construction delays caused by this spring’s record-breaking rain. Even with an almost rain-free third quarter, home builders closed only ≈6,800 homes (24,000 homes in the past 12 months) in the Metroplex.

During the process, homebuilders discovered that they could not find enough skilled construction labor to increase their pace of building. After the last downturn, 2 million construction workers were laid off.  570,000 of those workers, emigrants from Mexico during the last housing boom, have now left the US for good. Domestically, young workers never took up craftsmen trades due to the lack of construction jobs in the past decade. Now, carpenters, electricians and plumbers are hard to come by, and those that are available for work come at a huge premium. In Texas, many workers chose work in the oil fields over work in the construction industry. The labor shortage is exacerbating the supply shortage of residential properties.  Single family home inventory sold in 38 days or fewer in August, faster than anywhere else in the country. Available homes for sale in DFW remain near all-time lows at around 2.5 month’s inventory, compared to 6-7 months historically.

Rental demand in DFW remains robust. By our own survey, DFW class A rental properties have a vacancy rate of just under 2%. Even as crashing oil prices finally slowed down job growth in Texas, DFW continues to create around 100,000 net new jobs per year, while the rest of Texas will add only around 100,000 new jobs in the next year. Demographics have contributed to the pressure on the rental supply. Millennials, when venturing out on their own for the first time, are more likely to rent than to purchase a home. 

The latest rent versus buy study by Trulia showed that DFW median rent has risen to $1,550 per month while DFW homeowners pay only around $1,100 per month (about 40% less). Thus, while homes prices are rising faster than we would like, DFW homes, compared to rents, are cheaper than 90% of US metros and arguably as cheap as it was three years ago. Indeed, home price gains are simply reflecting a multi-year supply-demand imbalance, current rental and mortgage rates, and low median home prices at the start of this multi-year run.  According to the latest Zillow estimate, DFW median home price is $168,000, still 6.8% below the national average of $180,100 and less than 3X median income.

Our Framework for Selecting Property

We continue to be disciplined in our acquisitions, rehabs and new construction. Our four criteria for selecting property for the Fund are 1) desirable location (good schools, safe neighborhood, quiet street); 2) appealing home for the location (size, number of rooms, amenities; 3) gross rental yield of 12% or more; and 4) a purchase price significantly below replacement and market value.

By only purchasing homes that fit our strict criteria, the Fund expects to achieve a minimum net rental yield of 8%. Combining the rental yield with our projected 3-6% annual increase in home prices, the Fund can provide investors with good current income and total return of around 12% annually.

We look forward to giving you an update next quarter. In the meantime, please don’t hesitate to contact us should you have any questions, comments or concerns. We always welcome the opportunity to speak with our partners.

IMPORTANT LEGAL NOTICE

This communication and the information contained herein are confidential and proprietary to Bridge Tower Partners, GP, LP (together with its affiliates, “Bridge Tower”, “we”, “our” or “us”) and are being provided to the recipient by Bridge Tower upon the request of the recipient in confidence on the understanding that the recipient will observe and comply with the terms and conditions set forth in this paragraph and the following paragraphs. By accepting this communication, the recipient agrees that the information contained herein is for the exclusive use of the recipient and, without the prior written consent of Bridge Tower, the recipient shall not (i) copy, distribute, make available or otherwise disclose any information in this communication to other parties, or (ii) use such information for any purpose other than the specific purpose of evaluating a potential investment opportunity with Bridge Tower or learning more about Bridge Tower. This communication must be returned to Bridge Tower upon Bridge Tower’s request. Notwithstanding the foregoing, the recipient of this communication may disclose to any and all persons, without limitation of any kind, the tax structure and tax treatment of any investment opportunity with Bridge Tower and all related materials of any kind that are provided to the recipient.

This document and the information contained in this document do not constitute, or form part of, any offer to sell or issue, or any solicitation of an offer to buy or subscribe for, any shares or other securities in any Bridge Tower-sponsored fund or investment vehicle. In deciding whether to invest, prospective investors will be provided with a Confidential Private Placement Memorandum or other offering materials, which include information about risks associated with an investment and the material terms of the relevant fund or investment vehicle’s constituent documents. The recipient acknowledges that this communication does not contain certain material information about Bridge Tower’s investment processes or any specific investment opportunity, including important disclosures and risk factors, which are contained in the definitive investment documentation. The information contained in this communication is subject to all such definitive investment documentation.

The value of investments may fall as well as rise. Any investment with Bridge Tower is suitable only for sophisticated investors and requires the financial ability and willingness to accept for an indefinite period of time the risks and lack of liquidity inherent in the strategy and instruments of such investments.
Certain information (including any statements of opinion and/or belief) contained herein is based on or was obtained or derived from data published or prepared by other parties. While the unaffiliated third-party sources are believed to be reliable, neither Bridge Tower nor any of its directors, officers, employees, partners, shareholders or agents has independently verified such information nor assumes any responsibility for the accuracy of any such information and no such party shall have any liability to any recipient of this communication or any other person relating to or resulting from the use of or reliance on any such information contained herein or any errors therein or omissions therefrom.

No representation, warranty, assurance or undertaking (express or implied) is given (and can therefore not be relied upon as such), and no responsibility or liability is or will be accepted by us or any of our affiliates or our respective officers, employees or agents as to the adequacy, accuracy, completeness or reasonableness of the information, statements and opinions expressed in this document. Any opinions expressed in this document do not constitute legal, tax or investment advice and can therefore not be relied upon as such. The information contained in this document (which does not purport to be comprehensive) is believed to be accurate only on the date hereof and does not imply that the information herein is correct at any time after the date hereof and such information is subject to change at any time without notice. The views expressed herein are subject to change based on market and other conditions and we give no undertaking to update the information, to reflect actual events, circumstances or changes in expectations or to provide additional information after its distribution, even if the information becomes materially inaccurate.

To the extent that this communication includes information about prior investments or activities of Bridge Tower (or its affiliates) or projections of anticipated future performance and other forward-looking statements, such projections and forward-looking statements included herein, or otherwise made orally or in writing from time to time, are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict as well as factors that are beyond Bridge Tower’s control. Past performance is no guarantee of future performance and should not be relied on in deciding whether to invest. Any gross returns presented herein do not reflect the deduction of any management fees, fund expenses, carried interest, or other expenses that may be borne by third-party investors. An individual investor’s actual performance may vary materially based on any number of factors, including the timing of capital contributions and distributions as well as the deduction of all applicable fees and expenses.

The recipient acknowledges and agrees that no person has, nor is held out as having, any authority to give any statement, warranty, representation, assurance or undertaking on our behalf in connection with any potential investment. This communication is intended to be used in one-on-one communications by Bridge Tower, and to be provided by Bridge Tower to single recipients who have the opportunity to discuss its contents with Bridge Tower.

Categories2025

Macroeconomics Outlook 2025 Q2

By btinvest,

Macroeconomics Outlook 2025 Q2

We continue to believe US residential rentals, Dallas especially, will be one of the best investment opportunities in the next 3 years. US rental vacancies dropped to 6.8% in the second quarter, a level last seen 26 years ago, with average rental rates hitting another all-time high. All recent reports validate our thesis: The supply of homes available for rent in the US is insufficient to satisfy the surging demand for rental properties. The combination of slow wage growth, low savings, tight mortgage lending standards, and lack of starter homes for sale all contribute to the current shortage. The situation is even more extreme in Dallas, where the vacancy rates in desirable suburbs have dropped below 2%. We expect the current supply and demand imbalance to persist until at least 2018. 

Macroeconomics Outlook

US economy grew 2.3% in the second quarter, rebounding from a lackluster first quarter growth of 0.6%. Unemployment rate dropped down to 5.3%, close to the level of full employment. However, globally, China is slowing down rapidly, Europe and Japan are barely growing, and emerging markets are struggling from the drop in commodity demand and prices.

As the US economy picks up this summer and unemployment rates continue to drop, we expect that the Federal Reserve will attempt to raise the short-term rates this year, for the first time in almost a decade. However, the drop in raw material prices and the strengthening dollar is keeping the Federal Reserve’s measure of inflation below their 2% target, where an increase in short-term rates is warranted Thus, we do not believe the economic conditions will allow the Federal Reserve to raise short-term rates beyond 1% in the next twelve months. Fed Chair Yellen confirms our view in her July 15 testimony to congress, “What matters for financial conditions and the broader economy is the entire expected path of interest rates, not any particular move….Indeed, the stance of monetary policy will likely remain highly accommodative for quite some time after the first increase in the federal funds rate…”

As a result, we still believe mortgage rates will hover around 4% for the remainder of 2015. Accordingly, home prices will increase (though slower in the second half of the year).

Outlook for the Dallas Market

Heavy rain in the spring caused widespread damage and construction delays in Dallas. Luckily, only 2 of our homes suffered any water damage. The construction delay is exacerbating the supply shortage of residential properties.

Employment in Dallas/Fort-Worth metroplex remains robust, feeling no ill effects thus far from the crash in oil prices. We expect the metroplex to produce at least 100,000 net new jobs a year for the next 3 years. The creation of new jobs and associated demand for housing far outnumber the 25,000 new single-family homes being built in 2015. Anecdotally, we spoke to three large apartment operators who are turning away tenants after reaching 105% occupancy – an unusual situation caused by the operators leasing more units than available and then hoping some future tenants fail to show up.

Dallas home values jumped 8.4% in May (year over year), about twice as much as the national average. Unlike the pundits who are calling the Dallas home price surge a bubble, we believe Dallas homes remain extremely undervalued, especially when we factor in the low mortgage rate, low median home price, and the strong job growth in the city. According to the latest Zillow estimate, Dallas median home price is $164,200, still 9% below the national average of $180,100 and less than 3X median income. Compared to other large metros either in the US or abroad, where home prices are typically 5-10X the median income, Dallas homes remain an incredible value.

Foreign investors, especially the Chinese, have taken note of Dallas’ strong economic growth, excellent higher education system, and superior home affordability compared to California and New York. Chinese investors have increased their purchase of Dallas homes by at least 30% this year, now accounting for over 20% of sales to foreigners in the city. As more investors discover Dallas’ great value, we expect Dallas home prices to rise above the national average in the next few years

Our Framework for Selecting Property

We continue to be disciplined in our acquisitions. Our four criteria for selecting property

are 1) desirable location (good schools, safe neighborhood, quiet street); 2) appealing home for the location (size, number of rooms, amenities; 3) gross rental yield of 12% or more; 4) a purchase price significantly below replacement and market value.

We look forward to giving you an update next quarter. In the meantime, please don’t hesitate to contact us should you have any questions, comments or concerns. We always welcome the opportunity to speak with our partners.

IMPORTANT LEGAL NOTICE

This communication and the information contained herein are confidential and proprietary to Bridge Tower Partners, GP, LP (together with its affiliates, “Bridge Tower”, “we”, “our” or “us”) and are being provided to the recipient by Bridge Tower upon the request of the recipient in confidence on the understanding that the recipient will observe and comply with the terms and conditions set forth in this paragraph and the following paragraphs. By accepting this communication, the recipient agrees that the information contained herein is for the exclusive use of the recipient and, without the prior written consent of Bridge Tower, the recipient shall not (i) copy, distribute, make available or otherwise disclose any information in this communication to other parties, or (ii) use such information for any purpose other than the specific purpose of evaluating a potential investment opportunity with Bridge Tower or learning more about Bridge Tower. This communication must be returned to Bridge Tower upon Bridge Tower’s request. Notwithstanding the foregoing, the recipient of this communication may disclose to any and all persons, without limitation of any kind, the tax structure and tax treatment of any investment opportunity with Bridge Tower and all related materials of any kind that are provided to the recipient.

This document and the information contained in this document do not constitute, or form part of, any offer to sell or issue, or any solicitation of an offer to buy or subscribe for, any shares or other securities in any Bridge Tower-sponsored fund or investment vehicle. In deciding whether to invest, prospective investors will be provided with a Confidential Private Placement Memorandum or other offering materials, which include information about risks associated with an investment and the material terms of the relevant fund or investment vehicle’s constituent documents. The recipient acknowledges that this communication does not contain certain material information about Bridge Tower’s investment processes or any specific investment opportunity, including important disclosures and risk factors, which are contained in the definitive investment documentation. The information contained in this communication is subject to all such definitive investment documentation.

The value of investments may fall as well as rise. Any investment with Bridge Tower is suitable only for sophisticated investors and requires the financial ability and willingness to accept for an indefinite period of time the risks and lack of liquidity inherent in the strategy and instruments of such investments.
Certain information (including any statements of opinion and/or belief) contained herein is based on or was obtained or derived from data published or prepared by other parties. While the unaffiliated third-party sources are believed to be reliable, neither Bridge Tower nor any of its directors, officers, employees, partners, shareholders or agents has independently verified such information nor assumes any responsibility for the accuracy of any such information and no such party shall have any liability to any recipient of this communication or any other person relating to or resulting from the use of or reliance on any such information contained herein or any errors therein or omissions therefrom.

No representation, warranty, assurance or undertaking (express or implied) is given (and can therefore not be relied upon as such), and no responsibility or liability is or will be accepted by us or any of our affiliates or our respective officers, employees or agents as to the adequacy, accuracy, completeness or reasonableness of the information, statements and opinions expressed in this document. Any opinions expressed in this document do not constitute legal, tax or investment advice and can therefore not be relied upon as such. The information contained in this document (which does not purport to be comprehensive) is believed to be accurate only on the date hereof and does not imply that the information herein is correct at any time after the date hereof and such information is subject to change at any time without notice. The views expressed herein are subject to change based on market and other conditions and we give no undertaking to update the information, to reflect actual events, circumstances or changes in expectations or to provide additional information after its distribution, even if the information becomes materially inaccurate.

To the extent that this communication includes information about prior investments or activities of Bridge Tower (or its affiliates) or projections of anticipated future performance and other forward-looking statements, such projections and forward-looking statements included herein, or otherwise made orally or in writing from time to time, are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict as well as factors that are beyond Bridge Tower’s control. Past performance is no guarantee of future performance and should not be relied on in deciding whether to invest. Any gross returns presented herein do not reflect the deduction of any management fees, fund expenses, carried interest, or other expenses that may be borne by third-party investors. An individual investor’s actual performance may vary materially based on any number of factors, including the timing of capital contributions and distributions as well as the deduction of all applicable fees and expenses.

The recipient acknowledges and agrees that no person has, nor is held out as having, any authority to give any statement, warranty, representation, assurance or undertaking on our behalf in connection with any potential investment. This communication is intended to be used in one-on-one communications by Bridge Tower, and to be provided by Bridge Tower to single recipients who have the opportunity to discuss its contents with Bridge Tower.

Categories2015

Macroeconomics Outlook 2015 Q1

By btinvest,

Macroeconomics Outlook 2015 Q1

Macroeconomics Outlook

Our three major 2015 predictions for the housing market – 1) mortgage rates will hover around 4%, 2) Fed will be unable to raise short-term rates much, 3) home prices will appreciate at least around 4% – remain on track.

US economy disappointed in the 1Q, with preliminary 1Q GDP growth coming in at just 0.2%. The dismal result pushed projections of a mid-year interest rate increase to the fall. We continue to believe a small 25-50bps interest rate move, if it happens at all this year, will have little to no impact on our business and the US housing market. We strongly doubt the Fed has an appetite for more since the ensuing US dollar strength from a large interest rate move will likely push the US economy into a recession.

Outlook for the Dallas Market

Employment in Dallas/Fort-Worth remains strong from a combination of internal growth and corporate relocations to the region. The metroplex is currently producing around 120,000 net new jobs a year and unemployment hovers around 4%, more or less at full employment. Yet, builders will start construction on only 25,000 single family homes in 2015, just 25% of the number of net new jobs created. The severe shortage of desirable housing has caused homes values to jump 9% in the first quarter (year over year).

Despite the unsustainable surge in the 1Q, Dallas homes remain extremely undervalued, especially when one factors in the low mortgage rate and the moderate median income growth in the city. According to the latest Zillow estimate, Dallas median home price is $157,900, less than 3X median income. Compared to other large metros either in the US or abroad, where home prices are typically 5-10X median income, Dallas is cheap. We continue to be hugely bullish on Dallas housing for the next 3 years.

Our Framework for Selecting Property

We continue to be disciplined in our acquisitions. Our four criteria for selecting property are 1) desirable location (good schools, safe neighborhood, quiet street); 2) appealing home for the location (size, number of rooms, amenities; 3) gross rental yield of 12% or more; 4) a purchase price significantly below replacement and market value.

By only purchasing homes that fit our strict criteria, we expect to achieve a minimum net rental yield of 8%. Combined with our projected 3-6% annual increase in home prices, we can provide investors with good current income and total return of around 12% annually.

IMPORTANT LEGAL NOTICE

This communication and the information contained herein are confidential and proprietary to Bridge Tower Partners, GP, LP (together with its affiliates, “Bridge Tower”, “we”, “our” or “us”) and are being provided to the recipient by Bridge Tower upon the request of the recipient in confidence on the understanding that the recipient will observe and comply with the terms and conditions set forth in this paragraph and the following paragraphs. By accepting this communication, the recipient agrees that the information contained herein is for the exclusive use of the recipient and, without the prior written consent of Bridge Tower, the recipient shall not (i) copy, distribute, make available or otherwise disclose any information in this communication to other parties, or (ii) use such information for any purpose other than the specific purpose of evaluating a potential investment opportunity with Bridge Tower or learning more about Bridge Tower. This communication must be returned to Bridge Tower upon Bridge Tower’s request. Notwithstanding the foregoing, the recipient of this communication may disclose to any and all persons, without limitation of any kind, the tax structure and tax treatment of any investment opportunity with Bridge Tower and all related materials of any kind that are provided to the recipient.

This document and the information contained in this document do not constitute, or form part of, any offer to sell or issue, or any solicitation of an offer to buy or subscribe for, any shares or other securities in any Bridge Tower-sponsored fund or investment vehicle. In deciding whether to invest, prospective investors will be provided with a Confidential Private Placement Memorandum or other offering materials, which include information about risks associated with an investment and the material terms of the relevant fund or investment vehicle’s constituent documents. The recipient acknowledges that this communication does not contain certain material information about Bridge Tower’s investment processes or any specific investment opportunity, including important disclosures and risk factors, which are contained in the definitive investment documentation. The information contained in this communication is subject to all such definitive investment documentation.

The value of investments may fall as well as rise. Any investment with Bridge Tower is suitable only for sophisticated investors and requires the financial ability and willingness to accept for an indefinite period of time the risks and lack of liquidity inherent in the strategy and instruments of such investments.
Certain information (including any statements of opinion and/or belief) contained herein is based on or was obtained or derived from data published or prepared by other parties. While the unaffiliated third-party sources are believed to be reliable, neither Bridge Tower nor any of its directors, officers, employees, partners, shareholders or agents has independently verified such information nor assumes any responsibility for the accuracy of any such information and no such party shall have any liability to any recipient of this communication or any other person relating to or resulting from the use of or reliance on any such information contained herein or any errors therein or omissions therefrom.

No representation, warranty, assurance or undertaking (express or implied) is given (and can therefore not be relied upon as such), and no responsibility or liability is or will be accepted by us or any of our affiliates or our respective officers, employees or agents as to the adequacy, accuracy, completeness or reasonableness of the information, statements and opinions expressed in this document. Any opinions expressed in this document do not constitute legal, tax or investment advice and can therefore not be relied upon as such. The information contained in this document (which does not purport to be comprehensive) is believed to be accurate only on the date hereof and does not imply that the information herein is correct at any time after the date hereof and such information is subject to change at any time without notice. The views expressed herein are subject to change based on market and other conditions and we give no undertaking to update the information, to reflect actual events, circumstances or changes in expectations or to provide additional information after its distribution, even if the information becomes materially inaccurate.

To the extent that this communication includes information about prior investments or activities of Bridge Tower (or its affiliates) or projections of anticipated future performance and other forward-looking statements, such projections and forward-looking statements included herein, or otherwise made orally or in writing from time to time, are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict as well as factors that are beyond Bridge Tower’s control. Past performance is no guarantee of future performance and should not be relied on in deciding whether to invest. Any gross returns presented herein do not reflect the deduction of any management fees, fund expenses, carried interest, or other expenses that may be borne by third-party investors. An individual investor’s actual performance may vary materially based on any number of factors, including the timing of capital contributions and distributions as well as the deduction of all applicable fees and expenses.

The recipient acknowledges and agrees that no person has, nor is held out as having, any authority to give any statement, warranty, representation, assurance or undertaking on our behalf in connection with any potential investment. This communication is intended to be used in one-on-one communications by Bridge Tower, and to be provided by Bridge Tower to single recipients who have the opportunity to discuss its contents with Bridge Tower.

Categories2014

Macroeconomics Outlook 2014 Q4

By btinvest,

Macroeconomics Outlook 2014 Q4

Macroeconomics Outlook

Deflation fears have swept the market after growth slowed globally. Europe is barely growing. Russian economy is imploding from the sanctions. Japan is in recession. China is slowing dramatically. The only bright spot – the US – is plodding along at around 2% growth.

The 60% collapse in oil prices, caused by a combination of increased production from the US Shale Oil and a lack of demand in the global economy, adds to deflationary pressures.

To spur growth and stave off deflation, central banks around the world are doing the only thing they know how – print more money. European Central Bank will start quantitative easing (QE) next month. That has led to the Euro dropping to $1.10 per dollar and falling. In addition, Spanish and Italian bonds are now yielding less than US Treasuries and the German 5-year yields have turned negative! The impending European QE forced the Swiss National Bank to take off its peg to the Euro, causing Swiss Franc to appreciate 20% against the Euro in a single day and pushing Swiss 10-year yields negative. To fight the recession, Japanese central bank is threatening to print money at ever faster speeds, sending Japanese 10-year yield to 0.27%! Canada, India and Singapore have all slashed interest rate and weakened their currencies in the past few weeks to support their economies.

Here are the investment implications for 2015:

1. US long-term rates will stay low. Yield-hungry investors are piling into US Treasuries and mortgage bonds, driving up their prices and lowering their yield. Why would you buy German 10yr yielding at 0.35% when you can buy US 10-year bonds yielding 1.75%? This relative value dynamic has driven down 30yr mortgage rate in the US to around ~3.75%.

2. The Fed will not be able raise rates much in 2015. The Fed wants to raise short-term rates to 1.25% by the end of 2015, but we see very little chance of that happening. US corporate earnings are already hurting from the strong dollar.
Anything beyond a symbolic 0.25% raise will likely cause the dollar to soar and send US growth plummeting below 1%.

3. US home prices will increase in 2015. As the employment picture improves further in the US, the low mortgage rates will lure more buyers back to the market and send US home prices moderately higher. We project home prices in the US to rise about 3-4% in 2015.

Outlook for the Dallas Market

Dallas home values increased around 7% in 2014. Housing inventory remains tight at around 2 months (compared to historical average of 6 months) and demand remains strong from increased employment in the city and surrounding suburbs.

Toyota just moved its North American headquarters from California to Dallas, bringing with it 5,000 jobs to the city. State Farm, the insurance giant, is expanding its presence in Dallas, hiring more than 1,000 workers in the past year. Active Networks and Omnitracs, two technology companies, are also moving to Dallas, bringing 1,500 jobs with them from California. Overall, Dallas added around 110,000 jobs in 2014, pushing the unemployment rate to 4.6%, significantly below the 5.5% rate in the US.

Oil and gas production drives only about 11% of the Texas economy. On the local level, oil and gas related jobs make up less than 5% of total employment in Dallas compared to around 15% or more in Houston. Overall, in Dallas, we expect the small job losses in oil and gas industries will be offset by the jobs created in other industries, leading to moderate job growth and little impact on the real estate market.

With Dallas adding 100,000 jobs annually in the last few years, home builders have only built around 22,000 single family homes per year, far short of the 35,000 homes needed to satisfy demand. In addition, Dallas homes remain extremely undervalued even after the recent surge in price. According to the latest Zillow estimate, Dallas median home price is $152,600, less than 3X median income. Compared to other large metros either in the US or abroad, where home prices are typically 5-10X median income, Dallas is cheap. We project Dallas homes to appreciate another 5-7% in 2015 and remain hugely bullish on Dallas housing for the next 3 years.

Q&A Section: How do we (Bridge Tower) select our properties?

Our Framework for Selecting Property

Our four criteria for selecting property for the Fund are: 

    1. Desirable location (good schools, safe neighborhood, quiet street)
    2. Appealing home for the location (size, number of rooms, amenities
    3. Gross rental yield of 12% or more
    4. A purchase price significantly below replacement and market value

In Dallas, homes that satisfy all 4 criteria typically sell for $180,000 or below and rent for $1,800. Homebuilders, in addition to building less than market demand in the last 4 years, have decided to only build new homes for affluent customers. In 2014, out of the approximately 25,000 new homes built in 2014, less than 4000 homes (~15% total) are priced below $180,000. Since a significant portion of potential homeowners cannot afford these higher priced new homes, they have continued to rent, pushing Dallas vacancies to all-time lows.
By only purchasing homes that fit our strict criteria, the Fund expects to achieve a minimum net rental yield of 8%. Combined with our projected 3-6% annual increase in home prices, the Fund can provide investors with good current income and total return of around 12% annually.

IMPORTANT LEGAL NOTICE

This communication and the information contained herein are confidential and proprietary to Bridge Tower Partners, GP, LP (together with its affiliates, “Bridge Tower”, “we”, “our” or “us”) and are being provided to the recipient by Bridge Tower upon the request of the recipient in confidence on the understanding that the recipient will observe and comply with the terms and conditions set forth in this paragraph and the following paragraphs. By accepting this communication, the recipient agrees that the information contained herein is for the exclusive use of the recipient and, without the prior written consent of Bridge Tower, the recipient shall not (i) copy, distribute, make available or otherwise disclose any information in this communication to other parties, or (ii) use such information for any purpose other than the specific purpose of evaluating a potential investment opportunity with Bridge Tower or learning more about Bridge Tower. This communication must be returned to Bridge Tower upon Bridge Tower’s request. Notwithstanding the foregoing, the recipient of this communication may disclose to any and all persons, without limitation of any kind, the tax structure and tax treatment of any investment opportunity with Bridge Tower and all related materials of any kind that are provided to the recipient.

This document and the information contained in this document do not constitute, or form part of, any offer to sell or issue, or any solicitation of an offer to buy or subscribe for, any shares or other securities in any Bridge Tower-sponsored fund or investment vehicle. In deciding whether to invest, prospective investors will be provided with a Confidential Private Placement Memorandum or other offering materials, which include information about risks associated with an investment and the material terms of the relevant fund or investment vehicle’s constituent documents. The recipient acknowledges that this communication does not contain certain material information about Bridge Tower’s investment processes or any specific investment opportunity, including important disclosures and risk factors, which are contained in the definitive investment documentation. The information contained in this communication is subject to all such definitive investment documentation.

The value of investments may fall as well as rise. Any investment with Bridge Tower is suitable only for sophisticated investors and requires the financial ability and willingness to accept for an indefinite period of time the risks and lack of liquidity inherent in the strategy and instruments of such investments.
Certain information (including any statements of opinion and/or belief) contained herein is based on or was obtained or derived from data published or prepared by other parties. While the unaffiliated third-party sources are believed to be reliable, neither Bridge Tower nor any of its directors, officers, employees, partners, shareholders or agents has independently verified such information nor assumes any responsibility for the accuracy of any such information and no such party shall have any liability to any recipient of this communication or any other person relating to or resulting from the use of or reliance on any such information contained herein or any errors therein or omissions therefrom.

No representation, warranty, assurance or undertaking (express or implied) is given (and can therefore not be relied upon as such), and no responsibility or liability is or will be accepted by us or any of our affiliates or our respective officers, employees or agents as to the adequacy, accuracy, completeness or reasonableness of the information, statements and opinions expressed in this document. Any opinions expressed in this document do not constitute legal, tax or investment advice and can therefore not be relied upon as such. The information contained in this document (which does not purport to be comprehensive) is believed to be accurate only on the date hereof and does not imply that the information herein is correct at any time after the date hereof and such information is subject to change at any time without notice. The views expressed herein are subject to change based on market and other conditions and we give no undertaking to update the information, to reflect actual events, circumstances or changes in expectations or to provide additional information after its distribution, even if the information becomes materially inaccurate.

To the extent that this communication includes information about prior investments or activities of Bridge Tower (or its affiliates) or projections of anticipated future performance and other forward-looking statements, such projections and forward-looking statements included herein, or otherwise made orally or in writing from time to time, are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict as well as factors that are beyond Bridge Tower’s control. Past performance is no guarantee of future performance and should not be relied on in deciding whether to invest. Any gross returns presented herein do not reflect the deduction of any management fees, fund expenses, carried interest, or other expenses that may be borne by third-party investors. An individual investor’s actual performance may vary materially based on any number of factors, including the timing of capital contributions and distributions as well as the deduction of all applicable fees and expenses.

The recipient acknowledges and agrees that no person has, nor is held out as having, any authority to give any statement, warranty, representation, assurance or undertaking on our behalf in connection with any potential investment. This communication is intended to be used in one-on-one communications by Bridge Tower, and to be provided by Bridge Tower to single recipients who have the opportunity to discuss its contents with Bridge Tower.

Categories2025

Fresh Meadows Amenity Center Grand Opening

By btinvest,

Amenity Center Grand Opening

Download PDF

July 16, 2025

Bridge Tower Milestone in Temple, TX

58 Acres | 256 Homes | 2 Phases

Bridge Tower is pleased to announce the upcoming grand opening of the amenity center at Fresh Meadows, marking a key milestone in the delivery of our 256-home Build-to-Rent (BTR) community in Temple, TX. Opening July 31, the new amenity hub reflects our commitment to thoughtful, resident-focused design, featuring:

  • 3,600-square-foot clubhouse
  • Resort-style pool
  • State-of-the-art fitness center
  • Leasing offices
  • Indoor/outdoor yoga space 
  • Grilling stations
  • Community room with covered patio

Strategically located within the high-growth Austin MSA, Fresh Meadows spans 58 acres and offers a mix of single-story and two-story detached homes, anchored by a thoughtfully designed amenity center. The Bridge Tower team designed the community to accommodate a diverse resident base—from young families to active adults—by supporting a wide range of lifestyle needs, including wellness, recreation, connection, and relaxation. The development is being delivered in two efficient phases: Phase I (70 homes) was completed on schedule in September 2024, and Phase II (186 homes) remains on track for completion by year-end 2025. From entitlement through horizontal and vertical construction, BT’s work at Fresh Meadows demonstrates our ability to scale through strategic planning and disciplined execution.

Texas continues to be a cornerstone of Bridge Tower’s BTR and Single-Family Rental (SFR) strategy and Fresh Meadows is a prime example of our ability to execute high-quality, community-scale rental housing in dynamic markets. With active developments and property management operations in Dallas, Houston, Austin, and San Antonio, we have established a strong, statewide presence. Backed by our capacity to deliver 500+ homes annually, we are well-positioned to scale our platform—and we look forward to sharing future milestones as we expand our portfolio of high-quality BTR communities across key growth markets.

IMPORTANT LEGAL NOTICE

This communication and the information contained herein are confidential and proprietary to Bridge Tower Partners, GP, LP (together with its affiliates, “Bridge Tower”, “we”, “our” or “us”) and are being provided to the recipient by Bridge Tower upon the request of the recipient in confidence on the understanding that the recipient will observe and comply with the terms and conditions set forth in this paragraph and the following paragraphs. By accepting this communication, the recipient agrees that the information contained herein is for the exclusive use of the recipient and, without the prior written consent of Bridge Tower, the recipient shall not (i) copy, distribute, make available or otherwise disclose any information in this communication to other parties, or (ii) use such information for any purpose other than the specific purpose of evaluating a potential investment opportunity with Bridge Tower or learning more about Bridge Tower. This communication must be returned to Bridge Tower upon Bridge Tower’s request. Notwithstanding the foregoing, the recipient of this communication may disclose to any and all persons, without limitation of any kind, the tax structure and tax treatment of any investment opportunity with Bridge Tower and all related materials of any kind that are provided to the recipient.

This document and the information contained in this document do not constitute, or form part of, any offer to sell or issue, or any solicitation of an offer to buy or subscribe for, any shares or other securities in any Bridge Tower-sponsored fund or investment vehicle. In deciding whether to invest, prospective investors will be provided with a Confidential Private Placement Memorandum or other offering materials, which include information about risks associated with an investment and the material terms of the relevant fund or investment vehicle’s constituent documents. The recipient acknowledges that this communication does not contain certain material information about Bridge Tower’s investment processes or any specific investment opportunity, including important disclosures and risk factors, which are contained in the definitive investment documentation. The information contained in this communication is subject to all such definitive investment documentation.

The value of investments may fall as well as rise. Any investment with Bridge Tower is suitable only for sophisticated investors and requires the financial ability and willingness to accept for an indefinite period of time the risks and lack of liquidity inherent in the strategy and instruments of such investments.
Certain information (including any statements of opinion and/or belief) contained herein is based on or was obtained or derived from data published or prepared by other parties. While the unaffiliated third-party sources are believed to be reliable, neither Bridge Tower nor any of its directors, officers, employees, partners, shareholders or agents has independently verified such information nor assumes any responsibility for the accuracy of any such information and no such party shall have any liability to any recipient of this communication or any other person relating to or resulting from the use of or reliance on any such information contained herein or any errors therein or omissions therefrom.

No representation, warranty, assurance or undertaking (express or implied) is given (and can therefore not be relied upon as such), and no responsibility or liability is or will be accepted by us or any of our affiliates or our respective officers, employees or agents as to the adequacy, accuracy, completeness or reasonableness of the information, statements and opinions expressed in this document. Any opinions expressed in this document do not constitute legal, tax or investment advice and can therefore not be relied upon as such. The information contained in this document (which does not purport to be comprehensive) is believed to be accurate only on the date hereof and does not imply that the information herein is correct at any time after the date hereof and such information is subject to change at any time without notice. The views expressed herein are subject to change based on market and other conditions and we give no undertaking to update the information, to reflect actual events, circumstances or changes in expectations or to provide additional information after its distribution, even if the information becomes materially inaccurate.

To the extent that this communication includes information about prior investments or activities of Bridge Tower (or its affiliates) or projections of anticipated future performance and other forward-looking statements, such projections and forward-looking statements included herein, or otherwise made orally or in writing from time to time, are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict as well as factors that are beyond Bridge Tower’s control. Past performance is no guarantee of future performance and should not be relied on in deciding whether to invest. Any gross returns presented herein do not reflect the deduction of any management fees, fund expenses, carried interest, or other expenses that may be borne by third-party investors. An individual investor’s actual performance may vary materially based on any number of factors, including the timing of capital contributions and distributions as well as the deduction of all applicable fees and expenses.

The recipient acknowledges and agrees that no person has, nor is held out as having, any authority to give any statement, warranty, representation, assurance or undertaking on our behalf in connection with any potential investment. This communication is intended to be used in one-on-one communications by Bridge Tower, and to be provided by Bridge Tower to single recipients who have the opportunity to discuss its contents with Bridge Tower.

Categories2025

Investor Update July 2025

By btinvest,

Investor Update July 2025

July 15, 2025

Why Real Assets Work-Even When Markets Don't

In This Edition:

  • Investor FAQ: Why Are Real Assets the Future of Investing?
  • Our Decision to Go With SFR: A Post-2008 Origin Story
  • Market Pulse: Ownership Gap Continues to Drive SFR Demand

Investor FAQ with George Huang, PhD, Managing Partner at Bridge Tower

Q: Why are real assets the future of investing?

A: To unlock income that’s steady, resilient, and built to weather economic storms.

Real assets—like rental housing, infrastructure, and healthcare facilities—aren’t just physical investments; they’re powerful financial tools. They generate reliable cash flow, protect against inflation, and reduce exposure to stock market volatility. Historically, they’ve also delivered strong performance relative to assets with similar risk profiles.

Today’s shifting demographics and economic trends are fueling unprecedented demand for these tangible assets—especially in high-growth, high-need sectors like Build-to-Rent housing in affordable Sunbelt suburbs. It’s one of the most compelling opportunities for investors seeking long-term value in essential, income-generating real estate.

Have a question about the housing market? Email us at [email protected]—your question may be featured anonymously in a future edition!

Submit Your Question Today!

Real Assets, Real Returns. Are you in?

Align with experience and invest alongside us

BT Select Fund VI, a new investment vehicle focused on delivering risk-adjusted returns through purpose-built, professionally managed rental communities.

Prefer a direct investment? Limited spots available for Park Hollow, a BTR project in Richardson, TX.
Learn More

The BT Story: Why we Chose Single-Family Rentals (SFR)

We launched our SFR investment strategy in the aftermath of the 2008 financial crisis, when we saw a compelling alignment of factors:

  • Homes trading below replacement costs
  • A shift from ownership to renting
  • SFRs deliver consistent and stable returns
Those early decisions paid off. Our initial investors looked past the uncertainty, committed with conviction, and were rewarded with double-digit cash yields and strong total returns.

Along the way, we also learned that real assets truly withstand the test of time. And with fundamentals like strong demand, stable cash flow, asset price appreciation, and institutional scalability, we haven’t waivered from our commitment to growing with the sector.
View Opportunities

A Demand Story Still Unfolding: What It Means for SFR Investors

As interest rates remain high and housing options remain limited, many Americans have turned to SFR. We expect continued demand in both the near term and as demand drivers continue to compound over time. Fueling demand are two key factors:

  • Homeownership costs now far outpace the cost of renting
  • Lower mortgage rates won’t close the gap unless accompanied by substantial rent growth
As renting becomes not only more accessible, but also the more economically rational option, professionally managed single-family rentals are poised to capture a growing share of U.S. households seeking affordability, flexibility, and quality housing. Bridge Tower is in a unique position to capitalize on this growing demand! BT’s fully integrated platform and specialized focus on single-family rental (SFR) investments is a performance advantage in today’s market.
INVESTOR IQ

INVESTOR IQ

Did you know SFR (Single-Family Rental) typically refers to existing homes rented out individually, while BTR (Build-to-Rent) communities are purpose-built, professionally managed neighborhoods designed from the ground up for rental living—offering scalability, consistency, and institutional-grade operations.

At Bridge Tower, we’re seasoned experts in both SFR and BTR product, leveraging over a decade of experience in U.S. residential real estate!

IMPORTANT LEGAL NOTICE

This communication and the information contained herein are confidential and proprietary to Bridge Tower Partners, GP, LP (together with its affiliates, “Bridge Tower”, “we”, “our” or “us”) and are being provided to the recipient by Bridge Tower upon the request of the recipient in confidence on the understanding that the recipient will observe and comply with the terms and conditions set forth in this paragraph and the following paragraphs. By accepting this communication, the recipient agrees that the information contained herein is for the exclusive use of the recipient and, without the prior written consent of Bridge Tower, the recipient shall not (i) copy, distribute, make available or otherwise disclose any information in this communication to other parties, or (ii) use such information for any purpose other than the specific purpose of evaluating a potential investment opportunity with Bridge Tower or learning more about Bridge Tower. This communication must be returned to Bridge Tower upon Bridge Tower’s request. Notwithstanding the foregoing, the recipient of this communication may disclose to any and all persons, without limitation of any kind, the tax structure and tax treatment of any investment opportunity with Bridge Tower and all related materials of any kind that are provided to the recipient.

This document and the information contained in this document do not constitute, or form part of, any offer to sell or issue, or any solicitation of an offer to buy or subscribe for, any shares or other securities in any Bridge Tower-sponsored fund or investment vehicle. In deciding whether to invest, prospective investors will be provided with a Confidential Private Placement Memorandum or other offering materials, which include information about risks associated with an investment and the material terms of the relevant fund or investment vehicle’s constituent documents. The recipient acknowledges that this communication does not contain certain material information about Bridge Tower’s investment processes or any specific investment opportunity, including important disclosures and risk factors, which are contained in the definitive investment documentation. The information contained in this communication is subject to all such definitive investment documentation.

The value of investments may fall as well as rise. Any investment with Bridge Tower is suitable only for sophisticated investors and requires the financial ability and willingness to accept for an indefinite period of time the risks and lack of liquidity inherent in the strategy and instruments of such investments.
Certain information (including any statements of opinion and/or belief) contained herein is based on or was obtained or derived from data published or prepared by other parties. While the unaffiliated third-party sources are believed to be reliable, neither Bridge Tower nor any of its directors, officers, employees, partners, shareholders or agents has independently verified such information nor assumes any responsibility for the accuracy of any such information and no such party shall have any liability to any recipient of this communication or any other person relating to or resulting from the use of or reliance on any such information contained herein or any errors therein or omissions therefrom.

No representation, warranty, assurance or undertaking (express or implied) is given (and can therefore not be relied upon as such), and no responsibility or liability is or will be accepted by us or any of our affiliates or our respective officers, employees or agents as to the adequacy, accuracy, completeness or reasonableness of the information, statements and opinions expressed in this document. Any opinions expressed in this document do not constitute legal, tax or investment advice and can therefore not be relied upon as such. The information contained in this document (which does not purport to be comprehensive) is believed to be accurate only on the date hereof and does not imply that the information herein is correct at any time after the date hereof and such information is subject to change at any time without notice. The views expressed herein are subject to change based on market and other conditions and we give no undertaking to update the information, to reflect actual events, circumstances or changes in expectations or to provide additional information after its distribution, even if the information becomes materially inaccurate.

To the extent that this communication includes information about prior investments or activities of Bridge Tower (or its affiliates) or projections of anticipated future performance and other forward-looking statements, such projections and forward-looking statements included herein, or otherwise made orally or in writing from time to time, are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict as well as factors that are beyond Bridge Tower’s control. Past performance is no guarantee of future performance and should not be relied on in deciding whether to invest. Any gross returns presented herein do not reflect the deduction of any management fees, fund expenses, carried interest, or other expenses that may be borne by third-party investors. An individual investor’s actual performance may vary materially based on any number of factors, including the timing of capital contributions and distributions as well as the deduction of all applicable fees and expenses.

The recipient acknowledges and agrees that no person has, nor is held out as having, any authority to give any statement, warranty, representation, assurance or undertaking on our behalf in connection with any potential investment. This communication is intended to be used in one-on-one communications by Bridge Tower, and to be provided by Bridge Tower to single recipients who have the opportunity to discuss its contents with Bridge Tower.