Build-to-Rent Start-up Launches 211 Single-Family Homes in Sacramento

Sacramento, Tanzanite, New Growth Living, Montgomery Street Partners, Rockpoint Group, North Natomas
New Growth Living’s Tanzanite community in Sacramento, California, is a masterplan designed specifically for renters. Image courtesy Katerra.

New Growth Living Addresses Housing Shortage, Targeting Mid-Level Renters with Design-Forward Masterplans

Tanzanite Development Ushers the First of 1,600 Single-Family Homes Nationwide

Sacramento, CA – A team of national housing-industry leaders has launched a build-to-rent firm with their first community a model for the underserved “missing middle” and “by-choice” market desiring a single-family experience. New Growth Living in a partnership with Dallas-based Montgomery Street Partners and Boston-based Rockpoint Group, L.L.C., is creating planned Rentable Lifestyle Communities designed to create “pride of rentership” by making rental homes more attractive to residents, institutional investors and surrounding neighborhoods. New Growth Living’s inaugural community is Tanzanite in Sacramento, California. Several more developments in high-demand markets such as Austin and Dallas Texas, Central Florida, and Northern California are in various stages of planning.

Tanzanite, in Sacramento’s North Natomas neighborhood, is New Growth Living’s kick off into the emerging sector of homes built to rent, with 211 rental single-family styled homes in an artfully curated, walkable village adjacent to a community park. Tanzanite exhibits many of the characteristics that differentiates the firm’s approach, including a vibrant human-scaled village plan with leasing targeted towards the “missing middle” and “by choice” renters attainable to a wide range of the market. Tanzanite has started construction and opens in Q2 2022.  

“Purpose-built rentable lifestyle neighborhoods are the most important new category of housing in decades,” said New Growth Living CEO and Co-Founder Frank Cappello. “Our communities introduce attributes not yet found in the rental housing market. New Growth Living’s unique masterplans offer the some of the best solutions to the economic and social deficiencies of the U.S. housing market. Precisely targeting the “missing middle” with an amenity-rich, single-family styled community is just one of the solutions we bring to market.”

Cappello is a former partner at SunCal, one of the nation’s largest developers of mixed-use master-planned communities. Co-Founder Dan Nethercott is a former executive vice president at The Wolff Company, one of the nation’s largest real estate private equity firms. Joining them is an experienced executive team of industry veterans who have an aggregated production resume of nearly 150,000 residences.

“Our mission is to instill a sense of ‘pride of rentership’ in residents,” said Nethercott. “We envision an attainable and smarter American dream. NGL has assembled the knowhow, the capital and a detailed strategy to bring a new product to market, a rentable lifestyle neighborhood. Compared to its potential, build-for-rent has been an underserved segment of the housing industry. New Growth Living delivers a much-needed housing option that uniquely addresses lifestyle, affordability, community design, social demographics, sustainability and other essential issues facing the market.”

The investors validate this approach.

“Acute shortages of middle-market housing will continue to worsen the affordability crisis in many cities for at least five years,” said Montgomery Street Partner Max Lamont. “But design-forward masterplans such as Tanzanite will bring attractive long-term growth in the coming decades. And this approach is replicable across much of the country.”

Market Dynamics and Solutions

In 2020, approximately 6% (93,000) of all new single-family homes were built for rent. This ratio is expected to grow in 2021 by at least 1%. Conservative estimates anticipate over one million new rental homes will arrive in the next decade. As more people favor a single-family neighborhood rental experience, New Growth Living anticipates a growing consumer preference for “purpose-built” communities – that is, single-family styled masterplans attainably priced and crafted as vibrant communities, rather than scattered homes or enclaves that are after-thoughts in existing masterplans.

New Growth Living’s “rentable lifestyle” approach builds elegant, walkable, amenity-rich environments that are professionally managed. In addition to these attractions, New Growth Living achieves financial advantages by building efficient and creatively designed units, and by securing land at attractive price points, with an experienced development and acquisitions team that understands their key markets.

Places

The compact Tanzanite masterplan, at 3575 Airport Road, is expected to have 130 duplexes, 73 accessory dwelling units and eight single-family homes on a 15.19-acre site. The walkable community will have four common areas, including a clubhouse, pool and pool house. The updated Mid-Century Modern-style homes use large windows that help activate pedestrian zones while providing occupants natural light and a connection to the streetscape.

Tanzanite is adjacent to a community park, helping to serve another of New Growth Living’s goals: opportunities for active and healthy lifestyles. New Growth Living is both the developer and builder.

Team

In addition to Frank Cappello and Dan Nethercott, the founders of New Growth Living possess wide crossover skillsets in finance/investment management, entitlement, development and construction.

Jared Black has a 20+ year track record as a real estate investment manager and a fund sponsor devoted to multifamily investing, with a deep background in real estate law and corporate finance. He was most recently a co-founder and General Counsel for The Wolff Company.

Peter Johnson has 35+ years of experience and has led the entitlement and development of several large master-planned communities across the nation. He most recently served as Director of Development at Taos Ski Valley, responsible for infrastructure development related to a $350M investment from Moore Capital Management.

And with 30+ years of development experience, Kyle Lovelady has ledthe execution of more than $2.7 billion in large-scale residential developments, including 15,000+ apartments and 2,500 for-sale homes and townhomes. Most recently, he was an Executive VP at The Wolff Company, where he oversaw the firm’s expansion into Texas and the southeastern U.S.

The Resident Experience

As its communities emerge, New Growth Living will announce details of architecture, community planning, programming and amenities, sustainability and energy-efficiencies, smart technology and many other characteristics. The communities distinguish themselves not only apart from other rental developments, but from masterplans of for-sale homes as well.

Nethercott said the effect is the development version of “reversing gravity,” with a set of values and successes that will attract all related parties.

“As these places prove their worth – creating real neighborhood virtues – benefits flow back to residents, investors and into the larger communities that surround them,” he said. “This makes New Growth Living attractive to municipalities and their constituents. There is a tremendous opportunity to be the brand that can prove it truly cares about renters and celebrates their lifestyle.”

About New Growth Living
New Growth Living (NGL) is a private, purpose-driven real estate investment company that delivers high-quality, reasonably priced, indispensable housing in high-barrier-to-entry markets near strong employment centers. Our approach is holistic. We focus on maximizing the total return to each resident, our neighbors and our investors. We provide a unique, replicable model of residential development in harmony with city planners, landowners and other stakeholders. The New Growth Living ethic sets a superior benchmark in rentable housing across the nation.

West Coast Commercial Real Estate News