Founded in 2022, Brazos Residential, a Dallas-based real estate private equity firm specializing in multifamily, closed out the year with 15 acquisitions. Ten of the 15 are in North Carolina, where the company has quickly expanded its value-add investment strategies. Currently, Brazos holds over 2,700 multifamily units across the Sun Belt and controls over $350 million in multifamily investments. Multifamily Executive chatted with Will Hancock, co-founder and managing partner at Brazos, to see what’s next for the blooming firm.
MFE: As a newer firm, how was it to navigate the uncertainties of 2022?
Hancock: It was an interesting time to start an investment firm—but we had the ability to really focus on the uncertainty as it pertained to the market and not be preoccupied with how it would impact the deals we already owned. This is a luxury that many established firms didn’t have, and we feel that was what gave us the edge to buy some very exciting deals in 2022.
MFE: What makes the Sun Belt attractive for multifamily investments?
Hancock: The main reasons that we focus on the Sun Belt as our target market can be summed up in the fact that we look for growth. That growth can come from many facets such as population, jobs, rent, and infrastructure spending, but we want to invest where people want or need to be—and that has shown to be the Sun Belt.
MFE: What do you see happening in the Raleigh-Durham market? North Carolina as a whole?
Hancock: We feel that Raleigh will continue to see growth, although slower, with some of the tech companies shedding jobs. But when you have a very well-educated job force that is young and dynamic, we think that the overall metropolitan area will still be positive in the short term, and the long-term outlook is still very big for us with all the inflow of companies joining the area. As a state we are still extremely bullish and plan to continue to deploy capital here—more people and jobs are coming to North Carolina and these people need all types of housing. We want to be able to provide best-in-class housing to all demographics of renters.
MFE: What are some of Brazos Residential’s goals for 2023?
Hancock: Our main goal is to grow our base—meaning we are very focused on people internally and making sure that we are good at the basics, and that starts with a really strong foundation. We feel that we are going into a buying opportunity, and we don’t want to be in a position where we can’t capitalize on it.
MFE: Are there any concerns for this year?
Hancock: Our biggest concern is how we stay active in an ever-changing environment. We review deals daily and do what we can to keep a pulse on the market, but the last thing you want to do is stay still in a dynamic market as that means you could miss the boat on the buy or sell side.
MFE: What is the firm most hopeful to see in the multifamily industry this year?
Hancock: For us, 2023 is the year of clarity. We are looking for clear direction, from the Fed and from the real estate market as a whole.
MFE: How is Brazos Residential different from other private equity firms in the industry?
Hancock: It is simple. My business partner, James Roberts, and I share an obsession for multifamily, and our passion permeates throughout the entire organization. Along with our enthusiasm for what we do, we have the experience and the reps to do it well. James and I both spent several years in the multifamily brokerage community—James as an investment sales broker and myself as a debt/equity broker—and have collectively transacted on over 80,000 units. Many of the most successful multifamily sponsors were our clients. This provided us with an extremely unique perspective as we started our firm. It gave us an opportunity to emulate what it was that made those companies successful while avoiding some of the pitfalls that we observed. Additionally, we have surrounded ourselves with an incredible team that comes from some of the industry’s largest and most prolific firms, such as JLL, Monarch Investment and Management Group, Lincoln Property Co., and Berkadia. This has given us the ability to scale quickly but, most important, scale correctly.
MFE: Is there a current value-add project that the team is excited to complete?
Hancock: We have an asset in eastern North Carolina that will be our most comprehensive reposition to date. It is a true value-add in all aspects and was owned previously by the original developer. The property has heavy deferred maintenance well beyond typical. The before and after should be rewarding for all involved, including our residents, investors, and Brazos, which is the ideal outcome.
MFE: After 15 acquisitions in the first year, what’s next?
Hancock: We are continuing to grow our staff internally as we gear up for our next run. We will continue to buy deals at all periods in the cycle, but we believe a time will come that makes sense to “double down,” and we want to ensure that we are ready for it.