Connecticut-based Hamilton Point Investments announced 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 a 18.23 percent IRR, net to investors, and a 1.66-times 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,.
“We are pleased with the fund’s performance,” said HPI co-founder and managing principal, Matt Sharp. “We have a very specific and disciplined strategy that we feel provides a reasonably safe risk/reward profile.”
HPI closed its most recent Fund V in January after raising $115 million.
That is being leveraged to acquire approximately $300 million of multifamily apartment properties.
The fund has already closed on seven assets and has two more under contract.
“Hamilton Point Investments’ capital raising nearly doubled in 2017, which is strong when you consider that REIT and BDC sales dropped substantially during the year,” remarked HPI co-founder David Kelsey.
Kelsey and Sharp co-founded HPI in 2010 as a private equity investment company that owns and manages multifamily apartment properties.
Today the firm has over 180 employees and ihas completed over 60 real estate investments totaling 12,000 apartment units and $1.1 billion of value.