Hillpointe – a fully integrated real estate development and investment management firm focused on developing market-rate workforce housing in the Sun Belt – announced the closing of Hillpointe Workforce Housing Partnership V at its hard cap of $750 million.
Fund V represents Hillpointe’s largest fund to date and is expected to support the development of about 30 workforce housing projects in Hillpointe’s pipeline, representing approximately $2 billion of total asset value and 10,000 workforce housing units across the Sun Belt.
This significant milestone validates Hillpointe’s continued growth and commitment to deliver best-in-class new apartments competitively priced for workforce tenants.
Hillpointe believes the U.S. workforce housing sector exhibits a meaningful supply-demand imbalance. Workforce housing is generally defined as housing that is affordable to households earning between 60% and 120% of area median income, or about $50,000 to $85,000 annually.
In the last several decades, attainable rental housing has largely disappeared, with quality rental housing options increasingly restricted to top-end luxury renters. Due to rising construction costs, most newly developed rental units are unattainable for median-income earners, with the workforce housing component representing only a small fraction of newly developed units. When combined with general obsolescence—which removes an estimated 100,000+ units per year—there is a shortage of workforce housing.
The Hillpointe Workforce Housing Partnership V surpassed its $600 million target and achieved its hard cap of $750 million. The fund did not have a placement agent. Greenberg Traurig serves as legal counsel, and Juniper Square serves as fund administrator.
KEY QUOTES:
“We are thrilled to announce the successful closing of Fund V at its hard cap of $750 million, a testament to the confidence our investors have in Hillpointe’s mission and execution. This fundraise not only marks another milestone for our growing company but also enables us to deepen our impact by delivering best-in-class housing solutions that support the backbone of our communities. We believe attainable housing is a rent classification; it shouldn’t be a quality classification. Our ability to deliver a state-of-the-art multifamily product at a significant discount to our competitors enables us to pro-forma attainable, or workforce housing rents, and still have our projects pencil from a financial standpoint.”
– Steven Campisi, Co-Founder and Managing Partner
“We believe the current market environment presents a compelling opportunity for well-capitalized operators who can execute new multifamily developments today. Demand tailwinds, including demographic-driven household formation and Sun Belt migration, remain firmly intact. At the same time, we believe the steep decline in new construction starts will eventually translate into further supply shortages, particularly in high-growth markets. With deliveries set to drop meaningfully after 2025 we believe conditions, while not factored into our base case underwriting, are setting up for an extended period of rent growth and operational strength in the second half of the decade.”
– Kelly Mahoney, Co-Founder and Managing Partner
“We continue to believe the combination of Hillpointe’s unique access to capital and our ability to deliver new assets at an attractive cost basis positions the firm to capitalize on a highly favorable market environment and deliver new assets into a market with significantly less competition. With our fully integrated development model that allows us to control costs, underwrite new development opportunities to an attractive unlevered yield on cost and secure financing where others are unable, we are increasingly excited about the emerging landscape for current projects. We are grateful for the continued trust that our investors have placed in us, and we remain highly committed to delivering outstanding results.”
– Jeff Goll, Managing Director and Head of Capital Markets
