2024 Year In Review

This time of year it is always a good exercise to pause, sit down, and review the year that is ending. When you start to revisit your calendar, think through what happened, and list out the things that kept you so busy, you usually end up feeling quite accomplished. 

When we sat down and this did exercise for Wildhorn this year, I felt more than just accomplished. I felt damn proud of what we got done and how we went about our business. It’s no secret that the Central Texas apartment market has been tough to operate in; we’re working through a glut of new supply that is pushing down rents and occupancy. While we see bright lights at the end of the tunnel (expected to be the second half of 2025), it has made the day-to-day environment not a lot of fun. 

But navigating through this market has also made us much better operators. And it has forced us to be creative in how we approach new opportunities. On both fronts, the work we got accomplished in 2024 will help set the stage for what we do in 2025, 2035 and 2045.

Within our current portfolio, I’m most proud of:

• Launching our first Build-To-Rent Construction project. We closed our Lockhart new construction project at the very end of 2023. 2024 was spent mostly building the community and introducing our Wonderyard brand into the market. At this point, we are way ahead of schedule in our construction process and have been able to find some significant savings as we build it. Build-To-Rent is an asset class that we believe in over the long haul, and I’m very excited that we’ve made such good progress in building our first community in 2024.
• Watching The Merriman come out of the ground. The Merriman is our 313-unit ground-up construction asset in San Marcos. Over the course of 2024, we watched 13 acres of dirt turn into 9 buildings of a beautiful new apartment complex. With the first units expected to be delivered in early 2025, we spent the end of this year starting to work on marketing and leasing activities—which will be the majority of the focus next year. Merriman represents the first big development project we’ve been a part of, and it is extremely gratifying to watch the project take shape.
• Rezoning two existing assets to create future density and optionality. Within our portfolio of value-addValue-add is a strategy where an investor or property owner seeks to increase the value of a property by making significant improvements or changes to it. The goal is to enhance the property's appeal, functionality, and income-generating potential, which can lead to higher rental income, increased property valuation, and improved overall performance. assets, we own several very well-located, in-fill properties. Part of our attraction to the assets is the nature and desirability of their locations. For two of our assets this year, we were able to get the properties upzoned to allow for additional density on a future development. While our business plan may not be to tear them down and replace them with more units, being able to navigate the City and political environment to get them rezoned is an accomplishment to celebrate. It takes local knowledge and connections to get a rezoning complete, and it creates value and future optionality for both projects.
• Executing Two Loan Modifications.  Like most other operators, the combination of interest rate hikes and operational slowdowns has negatively impacted asset values and severely limited market participants. For two of our assets that had debt maturing this year, we needed to create additional time to finish completing our business plans and allow the market to rebound. In both cases, we were able to work with our current lender and negotiate a multi-year loan extension that avoids being forced to sell the asset at an inopportune time. While these are fun or easy conversations to have with lenders or investors, they were essential to be able to execute.
• Getting better as operators and fighting our tails off. When the market is moving against you, the details matter. Picking up nickels where you can find them, matters. Ensuring your teams know you are there to support them matters. Throughout this past year, we collectively crawled into the details of each of our assets to find and preserve value. We studied why one asset was doing such a good job of selling reserved parking—and took those learnings to the rest of the portfolio. We spent extra time with our teams so they knew we were in the fight with them. 2024 wasn’t the most fun year to be operating apartments, but we never wavered at any of the challenges. We fought hard every day for our partners and investors, for our residents and on-site teams. And I know we exit this year as much better operators than where we started it.

Outside of our navigating our portfolio, we were able to scratch out a couple of new business wins that will help propel us forward.

• Purchased a new multifamily asset in Round Rock. Working with an existing partner, we closed on an Affordable Tax-Credit asset that aligns with the strategy we have carved out with this group. Outside of the Affordable component of this transaction and asset, this acquisition mirrors the thesis and type of asset we plan to pursue in 2025; a newer vintage product (2000 and beyond), well located and purchased at a basis far below replacement cost and recent market highs. We are thrilled with the upside of this project after we finish repositioning it and view it as a roadmap for what is to come.
• Closed our first land development investment. We recently documented this project and our lessons learned, so we won’t rehash the details here. The short version is we closed on a residential land development project where we are partnering with our BTRBuild-to-Rent: a real estate development model where a property developer constructs a residential building, community, or group of single family homes with the specific intention of renting out the units rather than selling them as individual properties. homebuilder to put in the horizontal infrastructure and deliver finished lots that the builder will buy via an executed takedown contract. This represents a new strategy for us, the same about in our search for the next BTR site. With a unique investment structure for investors and having one under our belt, we’re eagerly anticipating several more of these projects in 2025.
• Began consulting with a Family Office on a disposition strategy for a large land tract. We are investors and operators, not consultants. But we’re also relationship-driven. Over the last few years, we have been introduced to and gotten to know a Family Office that has owned a large land position just East of Austin for a long time. They were looking for some help and direction on how best to monetize this investment and dispose of it in the most strategic and efficient way. As we got to know them and the investment, it became clear that they needed some local boots on the ground to help navigate things—and they approached us about helping assist the team on the project. What has resulted has been a fun consulting engagement in a submarket that we have a lot of belief in. It has also allowed us to lean into many of the local relationships we have fought hard to foster and continue to work with. Moreover, it has created a very strong relationship with a very quality partnership that we hope to work with for a very long time.

It’s a helpful exercise to review the year you had—and to celebrate the wins. The wins aren’t always obvious as they are happening, but when you sit back and review you can always find them. Looking back at 2024, I’m extremely proud of our team and what we got accomplished. What we learned, how we grew, and how we continue to evolve as a firm. 

We’re also ready to turn the page to 2025 and create a bunch more wins to look back on this time next year. Happy New Year everyone, and here’s hoping for a prosperous year for us all.