S
agard Real Estate has made a significant investment in Houston's multifamily market, acquiring the 330-unit Pearl Midlane property in the affluent River Oaks neighborhood. The firm purchased the property from The Morgan Group for an undisclosed price, assuming a $39 million mortgage from MetLife Real Estate Lending. The property was valued at $67.6 million this year, up from $49 million in 2018.

    The apartment complex, built in 2009 and revamped in 2021, features a pool, gym, workspaces, and a hotel suite for guests. It's located within walking distance of the Highland Village retail center and Tilman Fertitta's River Oaks District, which is set to undergo significant development with The RO, a 17-acre urban village.

    Sagard's investment in Pearl Midlane marks its continued pivot from office to multifamily and industrial investments. The firm recently sold a five-building office campus in Southern California for $27.5 million and purchased a 209-unit multifamily property in Tempe, Arizona last month.

    Despite the Federal Reserve's interest rate reduction, experts expect commercial transactions like these to continue. However, multifamily rents are still falling in Houston, with average Class-A rent dropping from $1,768 to $1,751 per month between September 2024 and the previous year, according to data from MRI Apartment cited by the Greater Houston Partnership.

    Sagard's focus on multifamily and industrial investments reflects a broader trend in the market. As interest rates remain low, investors are seeking alternative assets with stable cash flows, such as multifamily properties and industrial warehouses.