Real estate private equity firm Hamilton Point Investments (HPI) has acquired a four-property Houston multifamily portfolio built in 2022. The 1,174 units were purchased for $195 million, bringing HPI’s Texas portfolio total to 10 properties worth $450 million.
The portfolio includes 360 units at Prose Champion and 361 units at Prose Copperfield in Houston; 240 units at Prose Cypress Creek in Cypress; and 213 units at Prose Franz in Katy. The recent acquisitions are part of the firm’s recent push into Texas to capitalize on a 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%,” says 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. “Not much will be added to the market after this year, so growth will get things back on track,” adds Sharp.
The addition of the new multifamily properties significantly expands HPI’s footprint in the Lone Star State and nearly doubles the total number of Texas units it owns to more than 2,800. Existing properties within HPI’s Texas portfolio include The Dakota in Victoria; Icon at Yorktown in Houston; The Strake at Grand Central and Urban Oaks in Conroe; The Doral in Loredo; and Bungalows at North Hills in El Paso.
Sharp continues, “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.”
HPI owns and manages a portfolio spanning multifamily properties, student housing, hotels, and manufactured housing communities.
