Madera Residential and Sixth Street Real Estate have formed a joint venture that will focus on multifamily properties in certain regions within the Sunbelt.
Simultaneously with the announcement of the partnership, the two have revealed their first move together: a recapitalization of a six-community portfolio (1,967 units in total) in Houston, Texas. The names of the Class A properties under the deal include La Maison River Oaks, Chelsea Museum District, Vantage Med Center, The Montrose at Buffalo Bayou, The Lofts at CityCentre and Domain at CityCentre.
How much the JV plans to spend on multifamily going forward is unclear. Part of the strategy will include purchasing assets at discounts in high-growth areas with strong long-term potential, according to Adam Rapport, managing director at Sixth Street. Along with Texas, the duo plans to pursue opportunities in the Southeast as well.
This will mark a new chapter for Madera, as the move expands its collaboration now to institutional partners. In the past, it typically worked with affluent investors.
“The combination of our local expertise with Sixth Street’s institutional backing creates a compelling partnership poised to capitalize on the region’s strong fundamentals and we look forward to continued collaboration”, James Kane of Madera said in a statement.
According to Madera, the company operates 38 properties currently and a total of 11,568 units. Sixth Street has $115 billion in assets under management and allocated capital.
For Texas' multifamily sector — not all markets are created equal. Recent findings from Markerr show that smaller cities are expected to outpace the larger ones in terms of rent growth. For example, Midland is expected to be the leader in the Lone Star State over the next five years, with rent growth in the city forecasted at 5.5 percent. The next strongest Texas regions are projected to be Odessa at 5.1 percent and Waco at 5 percent, followed by Abilene, Longview and Laredo, all with forecasts of 4.6 percent. On the other hand, Austin, a major Texas region, is only expected to see 1.9 percent growth over that period.
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