21 May 2012

Investcorp’s US-based real estate arm today announced it has acquired an interest in a portfolio of four multifamily properties in Houston, Texas. The acquisition is consistent with Investcorp’s recent focus on high-yielding, stable real estate assets in the major metro areas of the United States.

Investcorp recapitalized the assets with current owner MHP Investments, which will retain an interest in the transaction. Affiliates of MHP currently own and manage approximately 6,000 units in Texas, Florida, and the Mid-Atlantic states.

The portfolio consists of four adjacent properties of 1,076 units in the master-planned Copperfield community of northwest Houston. The properties recently underwent a 
$6 million renovation and the portfolio is currently 95% occupied.

“Vacancy rates for rental apartments have declined, as home ownership in the United States has fallen to its lowest level in more than a decade,” said Brian Kelley, a Principal in the Investcorp real estate team. “This shift, in the context of relatively modest new supply, has created interesting opportunities in the multi-family sector.”

Investcorp financed the transaction with 10-year, fixed-rate financing.

Ryan Bassett, a Vice President in the Investcorp real estate team, said: “The Houston metro area continues to be one of the largest and strongest job producers in the nation, and many of Houston’s new jobs have been in the Energy Corridor of West Houston. We think MHP has done an excellent job with these properties to date, and we’re delighted to be working with them in this joint venture.”

This transaction is in line with Investcorp’s real estate investment approach of seeking out stable assets in major metro areas with strong fundamentals at attractive valuations. Earlier this year, Investcorp acquired a portfolio of office, industrial, and retail properties in the “North Bay” region of the San Francisco Bay Area for approximately $65 million.