Hamilton Point Investments, a real estate investment company that owns and manages multifamily apartment properties, reported that its 11-property, $205 million HPI Real Estate Opportunity Fund III has been fully liquidated.
A private investor purchased two of the properties, both in Atlanta, and a publicly traded REIT purchased nine assets in five states. The combined sale price was $278 million.
The successful full-cycle disposition yielded an 18.23 percent IRR, net to investors, and a 1.66x equity multiple over the fund’s 3.5-year hold period. These returns are averages, as some investors came in earlier than others, increasing their multiple and decreasing their IRR.
HPI buys post-2000 construction multifamily apartments in growing secondary markets with a value-add strategy in which the company completes modest unit interior and common area upgrades to increase cash flow and property value. Net operating income was increased by 38 percent over the hold period, leading to the very profitable sales.
“This fund, like our previous funds, delivered mid-to-high teens IRRs; we’ve done exactly what we said we would do in terms of investment strategy, reporting, hold period and returns,” said HPI co-founder Dave Kelsey.
Hamilton Point Investments has sponsored five real estate funds and seven DST offerings since 2009, acquiring more than 12,000 apartment units.
