Why Houston and Atlanta Anchor Our 2025-2026 Development Thesis
The case for building ground-up housing in the Sunbelt starts with a simple observation: people keep moving there. Houston’s metro population has climbed to roughly 7.9 million, adding about 126,720 residents year-over-year, a 1.6% gain. Atlanta sits near 6.48 million and continues to draw households from higher-cost regions. Population growth of this magnitude does not reverse quickly — it reflects jobs, affordability, and business relocation trends that have been building for a decade.
Demand is durable, supply is thinning
What makes the current moment interesting is the supply side. After a wave of deliveries, new construction pipelines in both markets have begun to thin. In Houston, 2025 groundbreakings fell by roughly 22% as higher financing costs pushed some builders to the sidelines. Atlanta delivered more than 22,000 multifamily units in 2025, but 2026 forecasts point to closer to 8,400 — a dramatic step down in new supply.
When durable demand meets a shrinking pipeline, the projects that break ground now are positioned to deliver into a tighter market. That is the essence of our thesis: begin construction during the slowdown so that completed homes arrive when competing supply is scarce.
Two markets, two profiles
Houston offers higher current cap rates — generally in the 6.0% to 7.0% range — and a more affordable entry basis, with a median list price near $362,000. Atlanta trades tighter, with cap rates around 4.5% to 5.3% and a median list near $429,000, but rewards owners with stronger recent rent growth of roughly 2.8% year-over-year. Holding both gives our strategy a balance of current yield and appreciation potential.
No forecast is guaranteed, and every market carries risk. But the combination of sustained in-migration and a contracting construction pipeline is exactly the backdrop we look for when committing capital to new development.
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