Sees Opportunity in Texas Apartment Pricing Downturn - Acquires 2,814 Apartment Units
Hamilton Point Investments (“HPI”), a real estate private equity firm, today announced that it has acquired a four-property Houston apartment portfolio totaling 1,174 apartment units, which were built in 2022. The properties were purchased from a Texas-based multifamily developer for $195 million, which represents a cost per unit of $166,100. Three of the assets closed in late June and one closed in May.
HPI owns and manages multifamily properties, hotels, student housing, and manufactured housing communities. It raises its equity from accredited individual investors through their independent broker-dealer financial advisors, as well as from registered investment advisors in a series of closed-end real estate private equity funds.
The Houston portfolio includes:
- Prose Champion in Houston – 360 units
- Prose Copperfield in Houston – 361 units
- Prose Cypress Creek in Cypress – 240 units
- Prose Franz in Katy – 213 units
These recent acquisitions build on the firm’s recent push into Texas to capitalize on the significant multifamily pricing correction occurring in the state.
“The submarkets were heavily overbuilt over the last couple years resulting in increased vacancy rates and decreased effective rents which, combined with interest rate spikes, led to value reductions of over 20%,” said Matt Sharp, HPI’s co-founder and managing principal. “We’re buying new construction today in Houston for around $165,000 per unit that just two years ago was priced at $210,000 per unit and would cost maybe $190,000 per unit to build today.”
HPI calculates that strong population and employment growth will return these markets to stabilized equilibrium by 2026, at which point fundamentals should push values back into that $210,000 per unit range.
“Not much will be added to the market after this year, so growth will get things back on track,” added Sharp.
HPI’s Previous Recent Texas Acquisitions
The addition of the new multifamily properties in Houston significantly expands HPI’s footprint in Texas and nearly doubles the total number of units it owns in the state. In total, the new acquisition brings HPI’s multifamily properties in Texas to ten, with more than 2,800 units owned in the state.
HPI existing properties in Texas include:
- The Dakota in Victoria – 224 units
- Icon at Yorktown in Houston – 115 units
- The Strake at Grand Central in Conroe – 317 units
- Urban Oaks in Conroe – 218 units
- The Doral in Loredo – 424 units
- Bungalows at North Hills in El Paso – 342 units
“There is no arguing the growth and success of Texas. We’ve wanted to buy there for years, but pricing was too high and didn’t align with our disciplined basis focused investment philosophy. This correction is advantageous for properly funded investors who are able to hang tough for a couple years,” concluded Sharp.
About Hamilton Point Investments
Hamilton Point Investments LLC (“HPI”) is a leading real estate investment owner and manager with a portfolio spanning multifamily properties, student housing, hotels, and manufactured housing communities. HPI deploys capital raised through investment funds from accredited individual investors via a network of independent broker-dealers and registered investment advisors. Founded by J. David Kelsey and Matthew A. Sharp in 2009, the firm has acquired more than 150 properties for over $3.5 billion since inception.
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Contacts
For Hamilton Point Investments: Maya Bogle mbogle@sloanepr.com
