- RREAF Holdings acquired the 510-unit 2828 at Royal Oaks after the property was lost to foreclosure.
- The property faced distress following default by Colony Hills Capital, exacerbated by lost tax credits.
- This marks RREAF’s third distressed multifamily acquisition in 2025 and its first with partner Axonic Capital.
- Rebranding and renovations are planned as RREAF expands its Houston multifamily footprint.
Distress Sparks Opportunity
The Real Deal reports that RREAF Holdings has capitalized on recent multifamily distress in Houston, acquiring the 510-unit 2828 at Royal Oaks in Westchase. The Dallas-based investor bought the garden-style community from AB CarVal Investors after a foreclosure, with Axonic Capital joining as equity partner. The deal underscores how multifamily distress can create entry points for new investors.
Market Pressures and Lost Tax Credits
Colony Hills Capital, the previous owner, had acquired the property in 2021 but struggled amid rising interest rates. Attempts to lower costs through a ‘traveling’ housing finance corporation for property tax credits were cut short when the Texas legislature closed the loophole in 2025. Loss of those credits contributed to financial distress, a scenario increasingly common across Houston multifamily assets.
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Regional Distress on the Rise
Houston’s multifamily sector continues to feel the strain, as investors and lenders push more distressed commercial properties to auction than anywhere else in the state. In January alone, lenders put $198M worth of Houston-area multifamily loans up for auction. The region’s broader commercial real estate challenges, including those tied to fluctuations in the oil sector, have added pressure to already strained assets. The loss of tax credits and higher rates continue to drive foreclosures and distressed asset sales in the region.
Renovation and Portfolio Growth
RREAF will rebrand the property as Aura Westchase. This year, the firm plans to renovate 37% of units and update amenities and signage. The purchase expands RREAF’s Houston multifamily portfolio to 2,000 units. It also highlights a broader strategy focused on acquiring and repositioning distressed multifamily properties. This latest deal is the company’s third such acquisition of 2025, but the first in partnership with Axonic Capital.
