Investment Highlights

Irreplaceable Basis

Opportunity to acquire 252 Class A units from the original developer at a price significantly below replacement cost in one of the nation’s fastest-growing counties. New Braunfels’ impact fees have nearly tripled alongside rising labor and material costs. The barrier to entry for new development widens with current replacement estimates in the $220,000 per unit range which is more than 70% above the Northwood Luxury Apartments offering price. This highly attractive basis allows investors to capture ongoing rent growth through targeted aesthetic and amenity enhancements as newer deliveries continue to push rental ceilings higher.

High-Growth Market Dynamics

Located in one of Texas’s fastest-growing regions, New Braunfels and Comal County present an extraordinary growth narrative. Over the past five years, New Braunfels’ population surged by more than 30%, while the county as a whole has logged annual increases in the 4-6% range and ranked among the top-growing U.S. counties. This powerful demographic momentum is backed by robust employment fundamentals, infrastructural investment and strong demand for high-quality housing. With the region projected to grow by more than 25% through 2030, this offering is strategically positioned to capture both the influx of new households and the downstream effect on rental demand and pricing power.

Supply & Occupancy Trends

Over the past twelve months, the Gruene submarket has experienced an unprecedented wave of deliveries — six new properties totaling 1,851 units, with an additional 746 units underway at Landhaus at Gruene and New Braunfels Heights. While this short-term supply influx has softened current occupancy levels, new construction activity is expected to taper significantly thereafter. This brief period of elevated competition presents an opportunity for the Northwood assets to capture the more cost-conscious renter segment seeking Class A finishes at a superior value. As the pipeline clears and absorption stabilizes, occupancy is expected to strengthen, positioning the portfolio to benefit from renewed rent growth and continued value-add potential while still maintaining a spread to market’s rent trendsetters.

Favorable Capital Markets Environment

The Federal Reserve’s recent 25-basis-point rate cut has improved overall liquidity and renewed momentum in multifamily lending. With borrowing costs trending down and spreads tightening, lenders are re-engaging across the capital stack, offering more attractive proceeds and debt terms. Lower rates translate to enhanced leverage, stronger cash-on-cash returns, and improved yield profiles for well-positioned assets. As capital markets stabilize, investors are again able to underwrite growth with greater confidence, making now an advantageous time to enter the market ahead of further rate normalization.