Hamilton Point Acquires Houston Four-Property Portfolio for $195 Million
Real estate private equity firm Hamilton Point Investments LLC 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.
Hamilton – a sponsor of private placement offerings – 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 advisers, as well as from registered investment advisers in a series of closed-end real estate private equity funds.
The Texas portfolio includes Prose Champion in Houston with 360 units, Prose Copperfield in Houston with 361 units, Prose Cypress Creek in Cypress with 240 units, and Prose Franz in Katy with 213 units. According to Hamilton, these recent acquisitions build on the firm’s push to capitalize on the significant multifamily pricing correction occurring in Texas.
“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, Hamilton’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.”
Hamilton 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.
The addition of the new multifamily properties in Houston significantly expands Hamilton’s footprint in Texas and nearly doubles the total number of units it owns in the state. The acquisition brings Hamilton’s multifamily properties in Texas to 10 and more than 2,800 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.
According to reporting by AltsWire earlier this week, Hamilton announced the close of HPI Real Estate Fund XII LLC. Launched in March 2023 seeking to raise up to $150 million from accredited investors, the fund ultimately raised $196 million through 32 independent broker-dealers and 18 registered investment advisers. The equity has been fully invested in eight multifamily properties totaling 2,118 apartment units.
Hamilton Point Investments LLC is a real estate owner and manager with a portfolio spanning multifamily properties, student housing, hotels, and manufactured housing communities. Since inception in 2009, Hamilton Point Investments has acquired nearly $3.5 billion of real estate, including more than 32,000 apartment units. The company has sponsored 13 real estate funds and seven Delaware statutory trust offerings.
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