This article by Marc Stiles originally appeared in the Puget Sound Business Journal.
Trilogy Investment Company & Pinnacle Partners Announce Joint Venture
Trilogy Investment Company, a leading national developer and provider of build-to-rent housing communities, and Pinnacle Partners, an early mover and leader in Opportunity Zone (OZ) real estate investing, have announced a new approx. $250M national joint venture beginning in Avondale, AZ. The new partnership, which was finalized in December 2022, will initially bring more than 105 new, build-to-rent homes to a Qualified Opportunity Zone in the Greater Phoenix area. The joint venture represents the first combined effort between Trilogy and Pinnacle. Total cost for the project is expected to be approximately $45 million; construction is expected to begin in late Q3 2023.
“One of the most important things about this joint venture is alignment of culture and values, collective rigorous review and selection of targeted projects, along with providing long-term, programmatic investment capital into Opportunity Zones across the Sun Belt Region and select Mountain West States),” said Leo Backer, Managing Partner at Pinnacle Partners. “On one hand, it will do what Opportunity Zones were designed to do: encourage solid investment in a designated area in need of development, and we’re excited to be a part of bringing that to Avondale. But it also signals our two firms coming together to do similar types of development in the future.”
It also represents a continued shift in housing, as interest rates and purchase costs remain high.
“With a market that has some barriers to purchase that we haven’t seen in some time – higher prices and rates pushing about 7% -- renting is much more attractive,” said Jason Joseph, Chief Executive Officer and Managing Partner at Trilogy Investment Company. “And the reality of the lack of housing inventory – and the somewhat smoother path to building single-family structures -- has opened new ground for builders and investors to fill those needs.”
“In addition to targeting areas where there is simply need and opportunity, we’re both attracted to these markets because of the population growth and the relative ability for average wages to support our investment objectives for each project,” said Jeff Feinstein, Managing Partner at Pinnacle Partners. “Our first venture and our plans for the future represent a terrific synergy of resources and expertise that will benefit investors, renters and their communities.”
Read the full article by Natalie Springfield at Creative Influence