Build-to-Rent Feasibility Study Case Study: A 180-Home Townhome Rental Community on SC 357 in Spartanburg County, South Carolina, Not Feasible as Proposed at 150 Mixed Detached and Attached Homes at 65 Percent Loan-to-Cost and Feasible as Restructured

A single-parcel build-to-rent community proposed on a 38.33-acre tract at 1587 Highway 357 near Lyman in unincorporated Spartanburg County, South Carolina, listed at $1,500,000, about $39,160 per acre, with power, water, natural gas and fiber at the road and no sewer listed, about six miles north of Interstate 85 and the Greenville-Spartanburg airport and four miles from BMW's Plant Spartanburg, in a metropolitan apartment market running 8.8 percent vacancy, $1,427 asking rents and 4.5 percent concessions, where the Upstate's purpose-built rental home communities quote 6 to 10 weeks free. The tract is under contract to another party at the study date and is carried as the illustrative site with that disclosure, with a 60.24-acre sewered tract on US 29 at Wellford as the live alternate. The sponsor proposed 150 homes, 90 of them detached three- and four-bedroom houses and 60 attached townhomes, at a $39,975,000 total development cost, $266,500 per home, with a 65 percent loan-to-cost bank construction loan of $25,984,000 converting to an agency permanent loan. At rents of $1,775 to $2,245, the 6 percent assessment ratio and 319.3 mills that South Carolina applies to rental housing, and a 94 percent stabilized occupancy, the community produces about $1,702,000 of cash flow after reserve in Year 3 against $1,971,000 of debt service, a coverage of 0.86x, and the agency takeout at 1.25x would refinance only $17,900,000 of the $25,984,000 construction loan. Restructured at 180 attached three-bedroom townhomes of 1,400 square feet in buildings of three or more units, at a $41,221,000 total development cost, $229,000 per home, with a $22,320,000 bank construction and mini-perm loan at 54 percent of cost that carries the community to Year 3 stabilization, an agency take-out of the same amount sized there to 1.25x, and $18,901,000 of equity, the community covers at 1.12x in Year 2 on the mini-perm and 1.25x in Year 3, 1.26x in Year 4 and 1.28x in Year 5 on the take-out, at a 59 percent loan-to-value on a $37,800,000 value at a 5.75 percent capitalization rate, with the Year 1 lease-up carried by the construction loan's interest reserve. Determination: not feasible as proposed; feasible as restructured, conditioned on site control of the subject or the Wellford alternate, written sewer and water availability, Spartanburg County's development plan approval under the Unified Land Management Ordinance for 180 homes on one parcel, the assessor's confirmation of School District 5 and the unincorporated levy, a guaranteed maximum price contract at the study's cost and an agency take-out commitment at 1.25x at Year 3 stabilization.

Model study prepared by MMCG Invest | Michal Mohelsky, J.D., FMVA | October 3, 2026

MMCG concludes that the proposed single-parcel build-to-rent community on SC 357 in Spartanburg County, South Carolina is not feasible as proposed and is feasible as restructured. The location and the demand are sound. The tract sits in the western Spartanburg County growth corridor between Greer and Lyman, six miles from the Interstate 85 interchange, the airport and the inland port, four miles from BMW's 11,000-employee plant, in a two-county metropolitan area whose purpose-built rental home communities, Durham at Wellford, L'Attitude34 at Greer, LEO Jamestown at Greer and Fairforest Creekside at Greenville, together put about 800 new rental homes into the market between 2023 and 2026 and leased them, at rents of $1,700 to $2,100 for a three-bedroom and $2,100 to $2,500 for a four-bedroom. The land basis is low at $8,300 to $12,500 per home. The proposal fails on three things the Upstate's own evidence shows. The first is cost: 90 detached houses on 28,000-dollar lots at $110 per square foot carry the community to $266,500 per home, a cost that a $1,950 average rent cannot service, because at the county's 6 percent assessment ratio and 319.3 mills a rental home pays about $4,300 a year in property tax, four times the owner-occupied bill on the same house, and the stabilized yield on cost is 4.4 percent against a 6.5 percent permanent rate. The second is leverage: at 65 percent of cost the $25,984,000 construction loan converts to $1,971,000 of annual debt service against about $1,702,000 of Year 3 cash flow after reserve, a coverage of 0.86x, and the agency permanent lender's 1.25x test would refinance only about $17,900,000 of it, leaving an $8,000,000 hole at takeout that the sponsor's $13,991,000 of equity does not cover. The third is the product's federal exposure: a detached house or a duplex is a single-family home under the ROAD to Housing Act, so a sponsor at or near the 350-home threshold holds 90 of the 150 homes under the Act's build-to-rent exception and its reporting from January 7, 2027, while the townhome buildings are outside the definition entirely.

Restructured at 180 attached three-bedroom townhomes of 1,400 square feet in buildings of three or more units, at $229,000 per home, with the sewer force main and pump station the unsewered site needs carried in the budget, a $22,320,000 bank construction and mini-perm loan at 54 percent of cost, refinanced at Year 3 stabilization by an agency take-out of the same amount sized there to 1.25x, and $18,901,000 of equity, the community covers at 1.12x in Year 2 on the mini-perm, 1.25x in Year 3, the first year on the take-out, 1.26x in Year 4 and 1.28x in Year 5, and builds to 1.43x by Year 15, at a 59 percent loan-to-value on a $37,800,000 value at a 5.75 percent capitalization rate. The restructured credit is one a construction lender and an agency takeout lender can approve: the bank carries the lease-up and Year 2, the take-out meets the agency's 1.25x coverage test at Year 3, where it is sized, at 59 percent of value against the 80 percent limit, the Year 1 lease-up through the phased delivery is carried by the capitalized interest and the operating deficit reserve, the product is the one the Upstate's absorbing communities are built from, the townhome buildings sit outside the federal single-family definition, and the rent of $1,895, or $1.35 per square foot, sits inside the attached three-bedroom evidence at Fairforest Creekside and below the detached and three-story townhome comparables. The sponsor should understand what the lender's determination does not say: the stabilized yield on cost is 5.3 percent, below the permanent rate, and the value at a 5.75 percent capitalization rate is about 92 percent of cost, so the equity's return depends on rent growth and the exit, which is the state of build-to-rent development in the Upstate in 2026 and the reason the leverage is 54 percent. The determination is conditioned on site control of the subject, whose contract to another party was in place at the study date, or of the Wellford alternate; on written sewer availability from the Town of Lyman, the Spartanburg Sanitary Sewer District or Spartanburg Water, or a state onsite treatment determination, and water availability from SJWD Water District; on Spartanburg County's development plan approval under the Unified Land Management Ordinance for 180 homes on one parcel at 4.7 homes per acre with the open space the ordinance requires; on the county assessor's confirmation that the tract lies in School District 5 and outside any municipality; on a guaranteed maximum price contract at the study's cost; and on a bank construction and mini-perm commitment with an agency take-out commitment at 1.25x at Year 3 stabilization.

This is an MMCG model study: a complete feasibility analysis performed on a real, publicly marketed parcel using public data, prepared to show construction lenders, agency and bank permanent lenders and build-to-rent developers how MMCG tests a single-parcel rental home community against the market's rents and concessions, the county's tax treatment of rental housing, the land ordinance, the federal single-family rules and the capital stack before a construction loan is sought. It is not a client engagement. MMCG has no relationship with the landowner, the listing brokers, the party under contract, Spartanburg County, the Town of Lyman, any utility or any prospective developer, and the analysis does not represent an offer, an appraisal or a recommendation to buy the parcel. Figures drawn from the listings, the Spartanburg County zoning page and planning FAQ, the Unified Land Management Ordinance as excerpted, the Town of Lyman's zoning ordinance, land development regulations and sewer rate schedule, SJWD Water District's fee policy, the South Carolina Association of Counties' 2025 property tax rates, the National Association of Home Builders' 2024 cost study, Yardi Matrix's June 2026 national report, CBRE's 2026 cap rate surveys, the Office of the Governor's BMW announcement and the enacted ROAD to Housing Act as summarized by the law firms cited are identified as such. Figures labeled MMCG assumption are underwriting inputs set by MMCG from industry benchmarks, including the October 1, 2026 rate deck, the first-quarter 2026 regional cost evidence, the national apartment operating expense survey and current bank and agency pricing. Items that could not be verified from a primary source at the study date are listed in the Conditions and Limitations section rather than estimated silently: in particular, the tract's assessor record, town-limits status and school district, sewer availability, the ordinance's controlling section numbers for density, open space and roads, the fire district millage, the ACS and building permit tables, the employers' headcounts, Upstate land sale comparables, the competitors' rents from their own sites and the agencies' single-parcel underwriting text. The CoStar figures for the Greenville metropolitan area are licensed data as of October 3, 2026.

The Project will operate as a 180-home single-parcel rental townhome community on the 38.33-acre tract at 1587 Highway 357 in unincorporated Spartanburg County, South Carolina, under a single-asset entity that borrows the construction loan and the permanent loan and holds the land, the homes and the operating business under common ownership and professional management. The physical program comprises 180 attached three-bedroom, two-and-a-half-bath townhomes of 1,400 square feet in two-story buildings of four to six homes each, for 252,000 square feet of homes, every home with a one-car garage and driveway, a fenced rear yard, a washer and dryer, a smart-home package and a private entrance, with a 4,000 square foot clubhouse containing the leasing office, a fitness room and a community room, a pool, a dog park, a mail kiosk, walking trails along the creek corridor and the open space the ordinance requires, on a site plan that places the buildings on the open upland in a loop road system off a single SC 357 entrance with a second emergency access, with the creek slope held as open space and the stormwater ponds at the low end. The density is 4.7 homes per gross acre and about 6 per net acre. The community will be managed by a third-party operator with Upstate rental home experience, with a community manager, a leasing consultant and two maintenance and grounds technicians on site, for about 4 full-time equivalents. The sponsor contributes the land and the equity and delivers the homes in six phases of 30 over twelve months.

Marketing and Sales Strategy

Pre-leasing begins six months before the first delivery from two furnished model homes and the leasing office in the first completed building, aimed at the household the Upstate's rental home communities have leased since 2023: the two-income family with children or a pet that works at BMW, its supplier park, the inland port, the airport district, Prisma Health or Spartanburg Regional, earns $75,000 to $110,000, cannot or does not wish to buy at Upstate prices and rates, and wants a garage, a yard and a school district rather than a corridor. Outreach runs through BMW's and the health systems' relocation and human resources channels, the school districts, the internet listing services where the competitors are found and the operator's regional waiting lists; the concession is set at six weeks free on a 13-month lease in the lease-up year, matching the competitors, and withdrawn as the phases fill. Retention runs through the garage, the yard, the smart-home package, the pool and the community's position as the newest attached product between Greer and Lyman, with renewal increases held at the market's 1 to 2 percent.

Amenities

The parcel is a 38.33-acre tract at 1587 Highway 357, Lyman, South Carolina 29365, in Spartanburg County, listed at $1,500,000, or $39,160 per acre, through National Land Realty, with tax map numbers 5-06-00-066.02 and 5-10-00-003.02, about 950 feet of frontage on SC 357, described by the broker as a residential development site, mostly open with scattered timber, rolling with a slope to a creek, with power, water, natural gas and fiber at the road and no sewer listed, and a zoning label of "Partial Restriction," which is a county Unified Land Management Ordinance district and places the tract in the unincorporated county rather than the Town of Lyman. The broker headlines the listing "under contract" and the aggregators show it as pending as of October 3, 2026; it has not been reported sold or withdrawn, and the study carries it as the illustrative site with that disclosure. The alternate is the 60.24-acre tract at US 29 and Fairforest Clevedale Road in Wellford, about 46 usable acres, listed at $3,900,000, or $64,741 per gross acre and about $84,800 per usable acre, through Huff Creek Properties and NAI Earle Furman, 2.4 miles from Interstate 85 and 2.2 miles from Interstate 26, on a corridor carrying about 40,000 vehicles a day per the broker, with water and sewer from Spartanburg Water per the listing; its land cost would add about $13,300 per home at 180 homes. The county's median land asking price on the aggregators is about $40,500 per acre, which places the subject at the market and the alternate above it for its sewer and corridor.

The tract sits at 34.9844, minus 82.1840, about 3.3 miles up Holly Springs Road from Lyman and 0.7 miles along SC 357, about six miles north of the Interstate 85 interchange that serves the Greenville-Spartanburg International Airport and the Inland Port Greer, and about four miles northeast of Greer and BMW's Plant Spartanburg, where the company employs more than 11,000 people with capacity of up to 450,000 vehicles a year and completed a $1.7 billion investment in electric vehicle readiness and a Woodruff battery assembly plant announced in October 2022. The Greenville-Anderson-Greer and Spartanburg metropolitan areas form the Upstate, whose apartment market held 8.8 percent vacancy, a $1,427 asking rent up 1.1 percent, 4.5 percent concessions, 1,080 units delivered in the last year at 1.9 percent of inventory and 1,429 units under construction at 2.5 percent in the licensed October 2026 data, an absorbing but loose market in which rental home communities price at a premium to apartments and lease with concessions. The headcounts of the inland port, the airport district, Prisma Health and Spartanburg Regional, the ACS household and renter tables for the Lyman, Duncan and Wellford tracts and the building permit series are conditions.

The site's three liabilities are its contract status; its sewer, because the broker lists water but not sewer, the tract lies several miles north of the Town of Lyman's system, and the outside-town capacity fee is double the in-town charge; and its tax district, because the Holly Springs area north of Lyman may fall in School District 1 at 375.8 mills rather than School District 5 at 319.3, which the sensitivity shows is worth nine points of coverage.

Spartanburg County operates two land ordinances, the Performance Zoning Ordinance in the Southwest Planning Area and the Unified Land Management Ordinance elsewhere, and neither assigns parcel-level use zoning. The Unified Land Management Ordinance, Ordinance O-99-015 adopted December 31, 1999 and amended through 2023, applies in the Partial Restriction district the listing names. Its compatibility table classes residential density as low, under 1 dwelling unit per acre, medium, 1 to 4 units per acre, and high, 5 or more; its text caps density at eight units per acre on minor streets, minor residential streets and major residential streets; it carries an open space requirement for high-density residential; and its Table 3a sets setbacks by road classification. The controlling section numbers for density, open space and roads are not confirmed and are a condition. The county's planning FAQ allows two detached dwellings on a single parcel as of right where each meets the road frontage standard of Section 7.30 of the Subdivision Regulations and the Table 3a setbacks as if on separate lots; a 180-home single-parcel rental community exceeds that allowance and goes through development plan review, whose track, multifamily or planned development, the planning department must confirm at a pre-application conference. At 4.7 homes per gross acre and about 6 per net acre the restructured program sits in the medium-to-high class under the eight-per-acre cap, and the creek corridor and the slope supply the open space.

If the tract were annexed into the Town of Lyman for sewer, the town's zoning ordinance, revised June 10, 2024, would apply: Section 201 establishes the R-15, R-8, R-8/10, RM multifamily high density, PH patio home and FRD flexible review districts, and Section 805 requires every one- and two-family structure, except as provided, to sit on its own lot of record, which conflicts with a single-parcel detached layout and points an annexed community toward RM or FRD. The town's land development regulations set a major residential subdivision fee of $750 or $10 per lot, whichever is greater, require two access roads built to town standards and state that the town will not own or maintain streets, sidewalks or curbs. The study's base case is the unincorporated county, with annexation run as a tax sensitivity only.

Water is provided by SJWD Water District, which serves western Spartanburg County and more than 87,000 people, provides water only and bills for the regional sewer providers including the Town of Lyman, Duncan, Wellford, Greer CPW and the Spartanburg Sanitary Sewer District. Under its meter and capacity fee policy effective April 14, 2023, a five-eighths-inch meter is $700 and the capacity fee $500 inside the district's tax district and $1,000 outside, or $1,200 and $1,700 per home; the study carries the outside figure. Sewer is the binding utility. The Town of Lyman's sewer rate schedule, adopted May 8, 2023 with tap and capacity fees effective January 1, 2023, sets a residential tap at $1,500 inside the town and $3,000 outside, a capacity fee of $5.00 per gallon inside and $10.00 outside and a $40 application fee; at a 300 gallon per day design flow (MMCG estimate, the town does not publish one) the outside-town charge is about $6,000 per home. No evidence of gravity sewer at the tract was found, the broker lists water but not sewer, and the parcel is several miles north of the town's system, so the study carries $7,700 per home of water and sewer fees, $1,386,000, and a $600,000 allowance for a force main, a pump station and the line extension (MMCG assumption), and makes a written availability and capacity letter from the Town of Lyman, the Spartanburg Sanitary Sewer District or Spartanburg Water, or a South Carolina Department of Environmental Services determination on a package treatment plant, a condition. The Wellford alternate has Spartanburg Water water and sewer per the listing, whose tap and capacity charges are quoted per application and are a condition.

Property tax is the largest line in the budget and the reason rental housing in South Carolina is underwritten differently from rental housing anywhere else in the Southeast. The state assesses owner-occupied legal residences at 4 percent of market value and exempts them from school operating millage, and assesses commercial and non-owner-occupied residential property at 6 percent with full school millage. The South Carolina Association of Counties' 2025 property tax rates, revised February 2026, set the Spartanburg County base at 85.6 mills, comprising operations 45.8, library 9.7, development standards 9.0, debt 6.3, technical college 5.8, recreation 4.4, animal control 2.0, Charles Lea Center 1.2, stormwater 0.9 and fire 0.5; School District 5 at 233.7 mills, comprising current operations 162.3, bonds 32.6, R.D. Anderson 6.2, general 13.0, McCarthy Teszler 10.9, University School 3.7 and teacher equalization 5.0; and School District 1 at 290.2 mills. Municipal levies are 60.6 mills in Lyman and 76.5 in Wellford, with the Spartanburg Sanitary Sewer District at 8.6 mills, the Startex-Wellford Water District at 11.2 and Metro Sub District B at 65.9 where applicable, a countywide landfill fee of $84 and a Wellford public works fee of $100. Fire district mills are not published in the county table and are excluded.

The study carries an assessor value of $225,000 per townhome (MMCG assumption, below cost and consistent with the county's practice of valuing rental homes from sales of comparable houses), for a Year 1 tax of $775,900, or $4,311 per home and $359 a month, which is 19 percent of the $1,895 rent and four times the $1,064 an owner-occupant would pay on the same house. No residential fee-in-lieu or special source revenue credit program was found in the county; those tools serve qualifying industrial investment. The assessor's record for the two tax map numbers, the school district and the fire district millage are conditions.

The primary market area is western Spartanburg County and eastern Greenville County along the Interstate 85 corridor from Greer through Lyman, Duncan and Wellford, which holds the employment that supplies the rental home household, with the two-county metropolitan area as the secondary area. The ACS five-year tables for the primary market area, tenure by household income, households with children and gross rent by bedrooms, the 2019 to 2025 building permit series and the Zillow rent index are conditions; the demand analysis below is built from the employment evidence, the competitors' absorption and MMCG's estimates of the primary market area's households and income distribution, and is identified as such. The employment evidence is BMW's more than 11,000 employees at Plant Spartanburg and its completed $1.7 billion expansion with 300 jobs at the Woodruff battery plant, the inland port and the airport district, and the two health systems, whose headcounts are conditions.

The study's demand for 180 rental townhomes is built from the income-qualified household pool for a $1,895 rent and from the Upstate's own absorption record. At a 30 percent rent-to-income ratio the qualifying income is $75,800, and at the 2.5 to 3.0 times rent that rental home operators screen to, $57,000 to $68,000; the study carries the qualifying band at $65,000 to $120,000. The primary market area is carried at about 60,000 households (MMCG estimate pending the ACS tables), with 32 percent renters, about 19,000 renter households, and 35 percent of renter households inside the band, about 6,700, before any allowance for the owner households that the Upstate's prices and rates push into rental and the relocating households that BMW, its suppliers and the health systems hire. The 180 homes are 2.7 percent of that pool, against the study's penetration test of 5 percent for a rental home product. The absorption evidence is stronger than the pool arithmetic: Durham's 205 detached homes at Wellford in 2023, L'Attitude34's 164 detached homes at Greer in 2023 and 2024, Fairforest Creekside's 140 townhomes at Greenville in 2023 and LEO Jamestown's 296 cottages and townhomes at Greer now leasing put about 800 purpose-built rental homes into the corridor in three years, and the first three leased them at rents above the subject's, with concessions of six to ten weeks free as the instrument. The study carries that instrument in its lease-up year and sizes the stabilized occupancy at 94 percent, below Yardi Matrix's national build-to-rent occupancy of 94.7 percent in June 2026, which fell 30 basis points year over year.

Two supply-side facts temper the demand. LEO Jamestown's 296 homes at Greer are in lease-up at eight weeks free, and the apartment pipeline of 1,429 units under construction, with 4.5 percent concessions in the stabilized stock, means the subject leases into a market that is still absorbing. The study answers both with a twelve-month phased delivery, a 45 percent average occupancy of the 180 homes in Year 1 and 92 percent in Year 2, and by holding the rent $100 to $200 below the attached and detached competitors.

The Upstate's purpose-built rental home supply within the primary and secondary market areas comprises eight communities identified at the study date, whose rents come from third-party listing sites as of October 3, 2026 and are not confirmed on the communities' own sites; every rent below is unverified and gross of the concessions observed. No purpose-built rental home community was found in Lyman itself; the conventional apartment inventory within five miles includes Cove at Pine Ridge in Lyman, whose unit count and rents are not confirmed. The five communities that set the subject's position are described below.

Competitor Number 1

Durham, 1056 Castlen Court, Spartanburg, in the Wellford area, by Quinn Residences: 205 detached one- and two-story homes with solar, delivered in 2023, with published three-bedroom rents of $1,738 to $2,124 and four-bedroom rents of $1,910 to $2,191, and a 2,152 square foot four-bedroom at $2,150 to $2,477. It is the nearest detached comparable and the evidence that a 200-home single-parcel community leased in this corridor; its rents on its own site, its occupancy and its concessions are not confirmed. Real estate taxes are not confirmed.

Competitor Number 2

Fairforest Creekside, 16 Creekhill Street, Greenville, by Quinn Residences: 140 attached three-bedroom townhomes in 25 buildings, delivered in 2023, with published rents of $1,755 to $2,282. It is the direct product comparable for the restructured program, attached three-bedroom townhomes in buildings of several homes under common ownership, and its rent range brackets the subject's $1,895. Rents on its own site, occupancy and concessions are not confirmed. Real estate taxes are not confirmed.

Competitor Number 3

L'Attitude34 Vines Creek, 403 Redear Road, Greer, by the Falcone Group with Rentyl: 164 detached three- to five-bedroom homes of 1,542 to 2,937 square feet, delivered in 2023 and 2024, with published four-bedroom rents from $2,134 and a range of $2,252 to $3,402 for three to five bedrooms, offering up to six weeks free. It is the larger-home detached product at the top of the corridor's rent range and the evidence of the concession the lease-up year must carry. Rents on its own site and occupancy are not confirmed. Real estate taxes are not confirmed.

Competitor Number 4

LEO Jamestown, 100 Galatians Drive, Greer, by Advenir Development: 296 duplex cottages and townhomes of one to three bedrooms, newly leasing in 2026 with published rents of $1,369 to $1,399 for a one-bedroom, $1,694 for a two-bedroom and about $2,099 to $2,124 for a three-bedroom, offering eight weeks free. It is the subject's direct lease-up competitor in time and in product, and its three-bedroom rent sits $200 above the subject's. Rents on its own site and occupancy are not confirmed. Real estate taxes are not confirmed.

Competitor Number 5

The secondary-area evidence comprises Gramercy Woods at Fountain Inn, operated by Greystar, detached and townhome three- to five-bedroom homes of 1,400 to 2,352 square feet delivered in 2024 at $1,699 to $1,999 for a three-bedroom, $2,299 to $2,524 for a four-bedroom and $2,649 for a five-bedroom; The Courts at Maverick Yards in Mauldin, 42 three-story three-bedroom townhomes of 1,735 square feet delivered in 2024 at $2,159 to $2,610; and Redwood Living's single-story attached two-bedroom communities at Greer and Mauldin at about $1,601 to $1,804. Home counts, rents on the communities' own sites, occupancies and concessions are not confirmed. Real estate taxes are not confirmed.

No Upstate community by NexMetro, Christopher Todd, BB Living, Yardly, Wan Bridge or Middleburg was found, though coverage was limited, and no rental home community is in the public pipeline at Lyman. The apartment pipeline of 1,429 units in the Greenville metropolitan area is the indirect competition.

The subject's rent is set from the Upstate's own evidence and the national benchmark. Upstate rental home three-bedroom rents cluster at about $1,700 to $2,100 and four-bedroom rents at about $2,100 to $2,500 before concessions, against a metropolitan apartment asking rent of $1,427 and a national build-to-rent advertised rent of $2,234 in June 2026, up 0.2 percent year over year, so the Upstate prices below the national product and well above its own apartments. The study carries the restructured 1,400 square foot attached three-bedroom at $1,895, or $1.35 per square foot, in Year 1, which sits inside Fairforest Creekside's $1,755 to $2,282 attached range, below Durham's detached three-bedroom midpoint of about $1,930, $200 below LEO Jamestown's three-bedroom and $260 to $700 below the three-story townhomes at Maverick Yards, and trends it at 2 percent to $1,933 in Year 2 and $1,971 in Year 3. As proposed, the detached three-bedroom is carried at $1,895, the detached four-bedroom at $2,245 and the 1,500 square foot attached three-bedroom at $1,775, a unit-weighted $1,917. Concessions are carried at 12 percent of gross potential rent in Year 1, six weeks free on a 13-month lease at the competitors' level, 5 percent in Year 2 and 2 percent thereafter. Other income, comprising pet rent, smart-home and technology fees, application and late fees and garage storage, is carried at $50 per home per month.

The study carries a land closing in the first quarter of 2027 on the subject, if its current contract fails, or on the Wellford alternate, nine months of development plan review and sewer engineering, a construction start in the fourth quarter of 2027, and six phases of 30 homes delivered from the fourth quarter of 2028 through the fourth quarter of 2029, with 2029 carried as Year 1 and the construction loan outstanding through it. Lease-up runs at 15 homes a month against the phased deliveries and reaches 90 percent of the delivered homes within 90 days of the last phase. The construction loan converts to the bank's mini-perm at the start of 2030, Year 2, and the agency take-out refinances it at the start of 2031, Year 3, once the community has held 90 percent occupancy for 90 days on stabilized income.

Year 1 occupancy is the average of the 180 homes across the phased delivery, not the occupancy of the delivered homes, which reaches about 85 percent by year end. The Year 1 operating result after reserve is a deficit of about $27,000, and the construction loan's interest for the year, about $1,533,000 at 6.87 percent on the $22,320,000 balance, is funded from the capitalized interest line and the operating deficit reserve. Rents trend at 2 percent, above the Upstate's current 1.1 percent apartment rent growth and the national build-to-rent 0.2 percent, and expenses at 3 percent.

Location: 1587 Highway 357, Lyman, SC 29365 (Spartanburg County) Size in SF (Gross): 256,000 Homes: 180

Source: Marshall & Swift CoreLogic, MMCG

Total project cost of $229,007 per home, with land at $8,556, carries vertical construction at $100 per square foot for production two-story attached townhomes in buildings of four to six homes (MMCG assumption), which sits below the National Association of Home Builders' 2024 national average of $162 per square foot for a 2,647 square foot detached home and its $153 median for a speculative detached home excluding the lot, both of which describe larger detached product, and well below the first-quarter 2026 Charlotte single-family range of $240 to $480 per square foot, which describes custom and high-end product; the attached figure must be confirmed by a guaranteed maximum price contract and is the first cost condition. Site development at $24,000 per home reflects a loop road system, mass grading on rolling terrain, stormwater on a creek slope and utility mains to 180 homes; the water and sewer fees are the published outside-district and outside-town charges at a 300 gallon design flow; and the sewer allowance reflects the absence of gravity sewer at the tract. All-in hard cost of $137 per square foot of home is the figure to test against the Upstate's production builders. The capitalized interest line and the operating deficit reserve together fund the construction period and the lease-up year's carry of about $1,533,000 after the Year 1 operating deficit. As proposed, the 150-home program carries 90 detached homes at $110 per square foot on $28,000 lots and a $1,000,000 amenity package, for $39,975,250 and $266,502 per home.

Loan Assumptions (as proposed)

Loan Assumptions (restructured)

The restructuring changes the product and the leverage together. The townhome program cuts the cost per home by $37,500 and the amenity package by $400,000, adds 30 homes on the same land, and sits outside the federal single-family definition; the loan is sized to the agency take-out at the stabilized year and the agency's floor rather than to a percentage of cost, which puts it at 54 percent of cost and 59 percent of value, and the equity rises by $4,910,000. The additional equity is the difference between what a rental home community costs to build in the Upstate in 2026 and what a $1,895 rent can carry under a 6 percent assessment ratio, and it is the sponsor's price of a credit a permanent lender will take out.

The permanent loan is underwritten through the agencies' multifamily channel, as single-parcel rental home communities under common ownership have been since the Federal Housing Finance Agency ended Fannie Mae's and Freddie Mac's single-family rental pilot programs in 2018, leaving the single-family investor programs capped at six properties per borrower for Freddie Mac and ten for Fannie Mae. Fannie Mae's 2026 conventional term sheet sets a 1.25x minimum coverage, an 80 percent maximum loan-to-value and stabilized occupancy, typically 90 percent for 90 days, before funding; Freddie Mac's conventional terms are the same, and Freddie Mac has financed stabilized build-to-rent communities, including a 54-unit community in Knoxville built in 2022 through a $18,400,000 permanent loan arranged by Arbor. The agencies' treatment of a single-parcel community versus subdivided lots in their current guides is not confirmed and is a condition of the takeout commitment. The 2026 conservatorship caps of $88,000,000,000 per agency exclude workforce housing and do not bind a market-rate loan of this size.

The 21st Century ROAD to Housing Act, Public Law 119-101, became law on July 11, 2026, and its large institutional investor provisions take effect 180 days later, on January 7, 2027, and are repealed 15 years after that date. It defines a large institutional investor as a for-profit entity in the business of owning or renting single-family homes with investment control of 350 or more, defines a single-family home as a structure, other than a manufactured home, with two or fewer dwelling units each intended for one household, prohibits such an investor from purchasing single-family homes, carries a build-to-rent exception for the purchase, construction, or construction and retention of newly constructed single-family homes managed as rentals in all-rental or mixed communities, requires no divestment of homes acquired before enactment, requires notification to HUD within 180 days of enactment and annually by December 31, and carries a penalty of the greater of $1,000,000 or three times the purchase price. Under the structure-level definition, a townhome building of three or more attached units is not a single-family home regardless of how it is platted or deeded, so the restructured 180 homes in buildings of four to six sit outside the cap and the exception framework entirely, while the as-proposed 90 detached homes would, for a sponsor at or above the threshold, rely on the build-to-rent exception and its reporting. The seven-year disposition requirement in the March 2026 Senate version does not appear in the enacted law. No enacted South Carolina statute limiting institutional single-family ownership was found; H.4584, Residential Property Interests, introduced January 13, 2026, would add disclosure requirements on the purchase of an interest in a managing entity of residential property and remains in the House Labor, Commerce and Industry Committee. The study presents the sensitivities a construction lender and an agency takeout lender expect: rent, occupancy, expense and interest rate cases, the two school district cases, the owner-occupied comparison, the combined case and the as-proposed case.

The Year 3 operating budget, the first year at 1.25x, at 94 percent occupancy and 2 percent concessions on a $1,971 rent is built by line for a 180-home rental townhome community in unincorporated Spartanburg County at a 3 percent escalation from the Year 1 budget.

Total operating expenses of $10,307 per home sit above the national all-product apartment average of $8,657 because the tax line alone is $4,573 per home, 44 percent of the budget, at the county's 6 percent ratio and full school millage; without it the community runs at $5,734 per home, which is where a new, tenant-metered rental home community with no corridors, elevators or central systems should run. Insurance is carried at $1,100 per home in Year 1 for new wood-frame attached homes in the Upstate with no coastal loading, above the national $777 average that rose 10.8 percent in the latest survey, escalating 3 percent; payroll carries the community manager, leasing consultant and two technicians; repairs and landscaping carry the exterior, roof, yard and common-area maintenance that the owner retains in a rental home community; utilities carry the common areas and the vacant homes with tenants paying their own electric, gas, water and sewer; and the management fee is carried at 5 percent of effective gross income for a third-party rental home operator. As proposed, the 150-home budget carries the same lines on 90 detached homes at $260,000 and $305,000 assessor values, for $4,924 of tax per home.

The Year 1 lease-up through the phased delivery is carried by the construction loan, whose interest of about $1,533,000 and the $27,000 operating deficit are funded from the $1,900,000 capitalized interest line and the $500,000 operating deficit reserve. The construction loan converts to the bank's mini-perm at the start of Year 2 and covers at 1.12x, and the agency take-out refinances it at Year 3 stabilization at 1.25x, the coverage to which it is sized, the structure of MMCG's bank construction to agency take-out study in Waukesha, Wisconsin. The community builds to 1.31x in Year 7, 1.37x in Year 11 and 1.43x in Year 15 as rents trend at 2 percent against expenses at 3 percent on a fixed-rate loan. The Year 3 yield on total project cost of 5.3 percent is the yield a $1,895 rental townhome earns at $229,000 per home under a 6 percent assessment ratio, which is why the leverage is 54 percent and the equity 46 percent. As proposed at 65 percent of a $39,975,000 cost, the 150-home program produces $1,750,000 of net operating income and $1,702,000 of cash flow after reserve in Year 3 against $1,971,000 of debt service, a coverage of 0.86x that reaches only 0.88x by Year 5, and the agency takeout at 1.25x would refinance about $17,900,000 of the $25,984,000 construction loan; the as-proposed row is the determination.

At Year 3 rates, the restructured community's fixed operating cost is $1,711,100, comprising taxes, insurance, payroll, repairs, utilities, marketing, turnover and the replacement reserve, and its variable cost is the 5 percent management fee on effective gross income.

The take-out is sized to 1.25x at the forecast occupancy. The 1.00x threshold at 83.6 percent is ten points below the forecast and eleven below the national build-to-rent occupancy, and the operating break-even at 42.0 percent is the statement of a community whose largest expense is a tax bill that does not fall when the homes are empty: the community pays its expenses at 42 percent occupancy and its debt at 84 percent, and the margin between them is the property tax.

The restructured community holds coverage above 1.0x in every single-factor case and in the combined case, which is the shape of a rental home credit at 54 percent leverage: it survives a rent miss, an occupancy miss, an expense overrun, the wrong school district or a rate move, and it survives two of them together. The owner-occupied case is illustrative only and is shown because it is the fact a lender new to South Carolina must hold: the same 180 homes sold to owner-occupants would pay about $203,000 of Year 3 tax rather than $823,000, and the 37 points of coverage between the two rows is the price of the 6 percent ratio. The School District 1 case is the one the assessor's record decides. The as-proposed structure fails in the base case.

The determination of not feasible as proposed and feasible as restructured is subject to the following conditions precedent on the restructured program:

The following items could not be verified from a primary source at the study date and are disclosed: the tract's current contract status beyond the broker's and aggregators' labels; its assessor value, town-limits status, school district and fire district; sewer availability at the tract and the Town of Lyman's design flow per home; the Unified Land Management Ordinance's controlling section numbers for density, open space, lot standards and roads, and the review track for a single-parcel rental community; the Wellford alternate's parcel identification, jurisdiction and Spartanburg Water charges; the ACS tenure, income, children and rent tables and the building permit series for the primary market area, from which the study's household, renter share and qualifying-band estimates would be replaced; the headcounts of the inland port, the airport district, Prisma Health and Spartanburg Regional; Upstate rental home land sale comparables, Southeast attached build-to-rent hard cost evidence and site work per lot; the competitors' home counts, rents, occupancies and concessions on their own sites and their assessor records; the Cove at Pine Ridge unit count and rents; 2026 construction loan terms for rental home communities beyond the broker and trade-press indications; the agencies' single-parcel underwriting text; an Upstate build-to-rent capitalization rate, which the study carries at 5.75 percent between the national 4 and 5 Star apartment rate of 5.6 percent and the overall 6.2 percent; and the pending Treasury and HUD reporting guidance under the ROAD to Housing Act.

This model study applies the methodology described on MMCG's build-to-rent feasibility study and multifamily feasibility study pages. MMCG prepares build-to-rent and multifamily feasibility studies for bank construction lenders, Fannie Mae and Freddie Mac takeouts, HUD, USDA and debt fund lenders nationwide, including in South Carolina, with engagements from $4,900 and delivery in 9 to 16 business days.