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Hamilton Point Fund Goes Full Cycle in 3.5 Years, Nets Over 18% IRR to Investors

HPI Real Estate Opportunity Fund III, an 11-property $205 million Reg D fund sponsored by Hamilton Point Investors, has been fully liquidated.

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HPI Real Estate Opportunity Fund III, an 11-property $205 million Reg D fund sponsored by Hamilton Point Investors, has been fully liquidated.

The fund sold the 11 properties for a combined $278 million. A private investor purchased two of the properties, while are both located in Atlanta, and a publicly-traded REIT purchased the other nine assets, which are located in five states.

HPI buys post 2000 construction multifamily apartments in growing secondary markets with a value-add strategy in which the company completes modest unit interior and common area upgrades to increase cash flow and property value. The company noted that the net operating income was increased by 38 percent over the hold period, leading to the profitable sales.

The full-cycle disposition yielded an 18.23 percent IRR, net to investors, and a 1.66x equity multiple over the fund’s 3.5-year hold period. These returns are averages, as some investors came in earlier than others, increasing their multiple and decreasing their IRR.

“This fund, like our previous funds, delivered mid-to-high teens IRRs,” said HPI co-founder Dave Kelsey. “We’ve done exactly what we said we would do in terms of investment strategy, reporting, hold period and returns.”

In related news, another Hamilton Point fund, HPI Real Estate Fund V LLC, closed last month after raising $115 million in investor equity.

Hamilton Point Investments was founded in 2009 and invests through a series of real estate private-equity investment funds raised through a network of broker-dealer financial advisors. The company has sponsored five real estate funds and seven Delaware statutory trusts offerings since 2009, acquiring more than 12,000 apartment units for more than $1 billion. Hamilton Point is based in Old Lyme, Connecticut, and its wholly-owned asset management office, Hamilton Point Property Management, is located in Atlanta, Georgia.

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