Hamilton Point Investments ‘goes big’ in Texas, acquiring $450 million in multifamily properties

He sees an opportunity in the decline in housing prices in Texas – he buys 2,814 apartments

HOUSTON, July 2, 2024–(BUSINESS WIRE)–Hamilton Point Investments (“HPI”), a real estate private equity firm, today announced that it has acquired a portfolio of four Houston properties, comprising a total of 1,174 residential units that were built in 2022. The properties were purchased from a Texas-based multifamily developer for $195 million, representing a unit cost of $166,100. Three of the assets closed in late June and one in May.

HPI owns and manages multifamily properties, hotels, student housing, and manufactured housing communities. It raises capital from accredited individual investors through independent broker-dealer financial advisors, as well as from registered investment advisors in a series of closed-end real estate private equity funds.

Houston’s portfolio includes:

Houston Prose Master – 360 units
Prose Copperfield in Houston – 361 units
Prose Cypress Creek in Cypress – 240 units
Prose Franz in Katy – 213 units

The latest acquisitions continue the company’s recent expansion into the Texas market, aiming to benefit from a significant correction in multifamily real estate prices in the state.

“The submarkets have been overbuilt in the last few years, which has resulted in rising vacancy rates and falling effective rents, which, combined with interest rate spikes, has led to depreciation of values by more than 20%,” said Matt Sharp, co-founder and managing director of HPI. “We’re buying new buildings in Houston today for about $165,000 per unit, compared to $210,000 per unit two years ago, and they would cost maybe $190,000 per unit to build today.”

HPI estimates that strong population and employment growth will bring these markets back into balance by 2026, when fundamentals should drive values to $210,000 per unit.

“After this year, there won’t be many new products on the market, so economic growth will help get things back on track,” Sharp added.

Previous Recent HPI Acquisitions in Texas

The addition of the new multifamily properties in Houston significantly expands HPI’s footprint in Texas and nearly doubles its total number of units in the state. In total, the new acquisition brings HPI’s total number of multifamily properties in Texas to ten, with more than 2,800 units owned in the state.

Existing HPI properties in Texas include:

Dakota in Victoria – 224 units
Icon at Yorktown in Houston – 115 units
Strake at Grand Central in Conroe – 317 units
Urban Oaks at Conroe – 218 units
Doral in Loredo – 424 units
Bungalows in North Hills El Paso – 342 units

“There is no doubt about Texas’ growth and success. We had wanted to buy there for years, but prices were too high and did not align with our disciplined, base-focused investment philosophy. This correction is good for well-funded investors who can hold out for a few years,” Sharp concluded.

About Hamilton Point Investments
Hamilton Point Investments LLC (“HPI”) is a leading owner and manager of real estate investments with a portfolio that includes multifamily properties, student housing, hotels and manufactured housing communities. HPI invests capital raised through investment funds from accredited individual investors through 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 more than $3.5 billion since its inception.

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Communication

For Hamilton Point Investments: Maya Bogle [email protected]