REAL ESTATE NEWS

Hamilton Zanze CEO Kurt Houtkooper is pursuing growth through two sharply different bets: building a long-term multifamily ownership vehicle from the firm's existing portfolio and buying distressed debt in San Francisco. Together, they reflect a strategy built less around waiting for conventional apartment deal volume to return than on creating new routes to scale.

Houtkooper, who will speak at GlobeSt.com's Multifamily Fall Owners Forum, is putting the firm's exchange expertise at the center of that effort. Hamilton Zanze began its Evergreen Fund in 2024 and has seeded it with 10 assets from its own portfolio. Four more were expected to enter the vehicle by year-end, bringing it closer to a $1 billion gross asset value target.

A Growth Engine Built In-House

For Hamilton Zanze, the use of 721 structures is not a side offering for investors looking to defer taxes. It has become the company's top growth initiative and a way to reshape the firm's large, established multifamily portfolio into a more durable capital platform.

The San Francisco-based apartment investor has 86 ventures, more than 200 properties and more than 25,000 units in its portfolio. Houtkooper sees that scale as an advantage: Rather than relying solely on acquisitions to expand, the firm can contribute properties it already owns into its Evergreen Fund. Hamilton Zanze expects another 25 assets from its portfolio to roll into the vehicle over the next two years.

That approach gives the company a way to retain ownership exposure while shifting assets into a larger, diversified pool. It also creates an internal pipeline that is less dependent on the pace of apartment sales, which remains uneven in many markets as buyers and sellers continue to navigate financing costs and valuation gaps.

The strategy also extends Hamilton Zanze's long-standing position in the exchange market. The firm has historically completed between 10 and 12 Delaware statutory trust acquisitions a year, according to Houtkooper. As those investments mature, they can become a source of additional assets for the Evergreen Fund.

The result is a circular model: Exchange-oriented capital supports acquisitions, and those assets can later feed a vehicle designed to hold a broader mix of properties over time. For a multifamily owner, it is an effort to turn a transactional business into one with a deeper base of recurring ownership.

Beyond The Traditional Acquisition Model

Houtkooper's emphasis on the Evergreen Fund suggests Hamilton Zanze is responding to a market in which simply buying another apartment property has become more complicated.

Multifamily investors have spent the past several years confronting higher interest rates, volatile property values and a widening divide between assets purchased at peak pricing and those acquired after the market reset. In that setting, firms with sizable existing portfolios can create value from their own balance sheets and investor relationships rather than relying entirely on new third-party acquisitions.

Hamilton Zanze is also positioning the fund to accept real estate contributed by outside owners. That would give owners of individual properties or smaller portfolios a path into a larger institutional-style vehicle while allowing Hamilton Zanze to grow without purchasing every asset with newly raised cash.

The strategy matters because it broadens the firm's potential sources of growth. In a conventional fund model, capital is raised and deployed into properties. Hamilton Zanze's model can add properties directly, allowing the vehicle to expand through contributions from its own portfolio, maturing DST assets and, potentially, other owners seeking a broader ownership platform.

That does not eliminate execution risk. The firm must determine which assets belong in the fund, set appropriate valuations, and demonstrate that a growing portfolio can deliver stable performance across market cycles. But it gives Hamilton Zanze a mechanism to keep building even when the traditional acquisition market is slow.

A Contrarian San Francisco Bet

The Evergreen Fund is only one half of Houtkooper's current agenda. The other is a more overtly contrarian play in San Francisco, where Hamilton Zanze has spent the past two years buying apartment debt at steep discounts and working through the process of gaining control of the underlying properties.

The firm has completed ventures involving $1.5 billion in debt product, purchased at an average discount of about $0.35 on the dollar, Houtkooper said. Through deeds in lieu of foreclosure or foreclosure proceedings, Hamilton Zanze has taken control of nearly 4,000 apartment units across 175 buildings.

The strategy reflects a willingness to step into a market that many apartment investors avoided as San Francisco struggled with weak office demand, population losses and questions about its economic recovery. Houtkooper's view is that the market's distress created an entry point that may be difficult to replicate once fundamentals improve.

He pointed to rent growth, occupancy, job creation and income levels as reasons for optimism. Whether that thesis plays out will depend on San Francisco's broader recovery and on Hamilton Zanze's ability to manage a large collection of buildings acquired through distressed debt rather than conventional property sales.

Still, the scale of the effort is notable. Hamilton Zanze is not making a handful of opportunistic purchases; it is assembling a substantial position in one of the country's most closely watched urban apartment markets.

Connecting Capital To Conviction

The two initiatives reveal a common thread in Houtkooper's approach: Hamilton Zanze is trying to use its existing capabilities—exchange expertise, a large portfolio and experience with multifamily ownership—to operate where market dislocation is creating openings.

The Evergreen Fund offers a path to long-term growth that does not depend entirely on asset sales or conventional fundraising. The San Francisco debt strategy, meanwhile, applies patient capital to a market where distress has reset pricing.

Both require a longer view than the quick-turn acquisition model that defined parts of the multifamily cycle before interest rates rose. Houtkooper's strategy is instead centered on assembling assets, retaining flexibility and building scale through structures that keep Hamilton Zanze connected to the properties it already knows.

Source: GlobeSt/ALM