Saxon Pond Flats Offering On RealtyMogul

The real estate investment platform RealtyMogul announced an offering for an equity investment in a multifamily development in Houston.

The Saxon Pond Flats is a ground-up development of a 360-unit Class A multifamily housing project in the northwest Houston submarket. The 14-acre parcel was acquired for $7.11 per square foot in 2021, and recent sales of similar properties averaged $9 per square foot.

Saxon Pond Flats is projected to have an all-in cost basis of only $172,000 per unit compared to comparable newly constructed properties in the submarket that are selling for between $200,000 and $230,000 per unit.

Construction of the multifamily asset is expected to begin in early 2023 with project stabilization expected in August 2025. Each unit will feature built-in desks with cabinets, black stainless steel appliances, first-floor private yards and larger balconies on the second and third floors. Residents will also benefit from a communal clubhouse and a walking path that surrounds the natural pond on the property. 

The submarket’s multifamily housing fundamentals related to consumer demand should provide added security for investors. The Houston metro area is expected to see a 2.6% increase in the number of renters over the course of the next five years, according to a CoStar Group Houston multifamily housing report.

The rising demand for multifamily housing can be attributed to the area's population and job growth. Metro Houston’s population increased from 5.7 million in 2010 to 6.9 million in 2019, according to the U.S. Census Bureau. The Texas Workforce Commission found that metro Houston had a 3.3% unemployment rate in December 2020, compared to the national average of 6.7%. Strong economic and population growth is expected to continue, which should aid the development sponsors in their search for tenants. 

• Minimum investment: $35,000
• Target internal rate of return (IRR): 20.2%
• Target equity multiple: 1.85x
• Target investment term: 40 months

Saxon Ponds Flats is a joint venture between the two sponsors: Ascension Commercial Real Estate and Moriah Real Estate Co.

Ascension was founded in 2008 and has since acquired or developed over 8,000 units across Texas. The investment and management firm specializes in realizing the operational and economic potential of multifamily assets through new development, proven value-adding strategies and hands-on management. 

Moriah Real Estate Co. has been a private equity investor and manager of commercial real estate since its inception in 2009. The firm’s principals have a combined 80 years of experience in owning and managing investment portfolios across multiple asset classes in 19 states. Since 2009, Moriah Real Estate Co. has completed over $2.2 billion in real estate transactions.

RealtyMogul will host a live webinar for the Saxon Pond Flats investment offering at 12 p.m. EST on Feb. 16.

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Photo courtesy of RealtyMogul