The 236-unit class-C residence is located on eight acres in North Houston. Under its new ownership, the property will be renamed Highland Cross Apartments.

“The current economic climate is driving a need for more affordable multifamily housing in Houston,” said John A. Latham, CIO of The PPA Group. “We've been noticing this trend for nearly a year now. It's no surprise the international community is seeing it too.”

One of the other interesting things about the Houston market, according to Latham, is that while new properties aren't always a great investment depending on the economic situation, value-add B- and C-class multifamily properties in Houston do very well for investors. Latham recently shared those insights with GlobeSt.com.

GlobeSt.com: What are the reasons that value-add B and C multifamily properties in Houston do very well?

John Latham: That's a great question. They appeal to the largest number of people because a lot of people are priced out of the class-A properties in the area. However, it's important to note that B and C are doing very well everywhere in Texas–it's the space that we primarily play in, and they are doing fantastic in every market for those same reasons.

A lot of it does have to do with fewer people buying homes and people renting longer–so there are some macro forces as well that are helping. Combine all that, and B and C are doing very well.

GlobeSt.com: What is the short-term outlook for recovery in Houston?

Latham: That's not something we worry too much about because it doesn't affect B and C, which primarily attract working class families. We cater to a very diverse job base, so while it will help us when Houston does recover, the greatest impact of economic development will be on class A.

GlobeSt.com: What about long-term opportunities such as office or class-A multifamily?

Latham: We have no plans to move into the office market for the foreseeable future. In regards to class-A multifamily in Houston–we do build class-A properties. We just built two class-A properties in San Antonio. We would be open to starting construction in Houston as soon as next year if the right opportunity presented itself, but there are a lot of factors at play, and we would need to be in the right market.

In the months following the acquisition, The PPA Group plans to create value for residents, investors and the influx of Houstonians in search of affordable housing by quickly renovating Highland Cross units, addressing deferred maintenance and upgrading the current amenity package. CLEAR Property Management will oversee all Highland Cross initiatives. The PPA Group is the parent company of CLEAR Property Management.

HOUSTON—From 2010 to 2014, the metro added nearly half a million jobs. The city has continued to post 12-month net job gains throughout 2015 and 2016, according to research by Greater Houston Partnership. The service industry is among the largest growing sectors, with four out of five workers in the Houston area employed in a service field.

At the same time, homeownership is down nationwide in response to the recent recession and real estate market crash. In 2015, the US Census Bureau reported the share of the US population who own homes had retracted to 63.4%—a 48-year low. Millennials have contributed in large part to this decrease by renting 2.6 years longer on average than earlier generations, according to Zillow real estate data.

Other investment factors are the current global macroeconomic and US economic conditions, including the allure of Texas (and specifically Houston) real estate to international investors. The juxtaposition of these key contributors has resulted in an increase in demand for class-C apartments.

The latest example is the PPA Group acquisition of Citation North Apartment Homes. The acquisition was enacted in partnership with a private Israeli investment company and the acquisition price was undisclosed. Grandbridge Real Estate Capital facilitated the transaction.

The 236-unit class-C residence is located on eight acres in North Houston. Under its new ownership, the property will be renamed Highland Cross Apartments.

“The current economic climate is driving a need for more affordable multifamily housing in Houston,” said John A. Latham, CIO of The PPA Group. “We've been noticing this trend for nearly a year now. It's no surprise the international community is seeing it too.”

One of the other interesting things about the Houston market, according to Latham, is that while new properties aren't always a great investment depending on the economic situation, value-add B- and C-class multifamily properties in Houston do very well for investors. Latham recently shared those insights with GlobeSt.com.

GlobeSt.com: What are the reasons that value-add B and C multifamily properties in Houston do very well?

John Latham: That's a great question. They appeal to the largest number of people because a lot of people are priced out of the class-A properties in the area. However, it's important to note that B and C are doing very well everywhere in Texas–it's the space that we primarily play in, and they are doing fantastic in every market for those same reasons.

A lot of it does have to do with fewer people buying homes and people renting longer–so there are some macro forces as well that are helping. Combine all that, and B and C are doing very well.

GlobeSt.com: What is the short-term outlook for recovery in Houston?

Latham: That's not something we worry too much about because it doesn't affect B and C, which primarily attract working class families. We cater to a very diverse job base, so while it will help us when Houston does recover, the greatest impact of economic development will be on class A.

GlobeSt.com: What about long-term opportunities such as office or class-A multifamily?

Latham: We have no plans to move into the office market for the foreseeable future. In regards to class-A multifamily in Houston–we do build class-A properties. We just built two class-A properties in San Antonio. We would be open to starting construction in Houston as soon as next year if the right opportunity presented itself, but there are a lot of factors at play, and we would need to be in the right market.

In the months following the acquisition, The PPA Group plans to create value for residents, investors and the influx of Houstonians in search of affordable housing by quickly renovating Highland Cross units, addressing deferred maintenance and upgrading the current amenity package. CLEAR Property Management will oversee all Highland Cross initiatives. The PPA Group is the parent company of CLEAR Property Management.