Hurricane Harvey has jump-started a recovery in Houston’s overbuilt market.
“Everybody is very bullish about multifamily in the city of Houston right now.” Chris Curry, HFF managing director
Houston-based GPI Real Estate Management Corp. has added a recently built apartment midrise in the Energy Corridor to its portfolio with the purchase of H6 in partnership with Hong Kong-based Wai Kee Holdings.
Abacus Capital Group, a New York-based apartment developer and operator, completed the 293-unit complex in 2015. The property, at 14805 Grisby Road, near the southwest corner of Texas 6 and Interstate 10, did not flood during Hurricane Harvey or subsequent releases from the nearby Barker and Addicks reservoirs, according to HFF, which marketed it.
The deal comes as Harvey has jump-started a recovery in Houston’s overbuilt apartment market. Displaced residents are filling up units in a market that had already slowed the pace of construction. About 10,000 units are under construction, with 5,500 units expected to be completed by year-end, according to HFF.
“Everybody is very bullish about multifamily in the city of Houston right now,” HFF managing director Chris Curry said.
“Since the hurricane, it’s only gotten stronger.”
So far in 2017, Houston has absorbed 23,901 apartment units, with 10,926 of the units leased after the storm, according to Apartment Data Services data provided by HFF. That surpasses the recent peak of 16,089 units absorbed in 2013 and compares with 4,492 units in 2016.
Several factors are driving multifamily sales, Curry said. Investors can often buy newer properties for less than the cost to build them, as material and labor costs have gone up. They will likely be able to get higher rental rates in the future as the market improves and concessions go away, he said.
Occupancy at H6 rose to 95 percent at the time of sale from 90 percent before the storm, Curry said. The four-story property, with one- and twobedroom units averaging 827 square feet, is zoned to Katy Independent School District. Contemporary-style units have stained concrete floors, European cabinetry, granite countertops and private yards in select units. Amenities include a pool, courtyard with Zen garden, fitness center, game room and dog park.
The HFF team representing Abacus Multi-Family Partners II also included senior managing director Todd Marix.
Abacus Capital Group also developed Parkway Flats at Westheimer and Eldridge in the Energy Corridor.
GPI Real Estate Management Corp. has purchased H6, a 293-unit apartment midrise at 14805 Grisby Road near Interstate 10 and Texas 6.