RREAF Buys Houston Apartments Lost to Foreclosure in 2025

It’s clear who the losers are in Houston’s wave of multifamily distress, but it hasn’t yet been obvious how to cash in on the cycle.

RREAF Holdings’ latest buy provides a template. The Dallas-based investor picked up 2828 at Royal Oaks, a 510-unit garden-style apartment complex at 2828 Hayes Road in Westchase, according to a press release. Deed records show RREAF bought the property after its previous owner lost it to foreclosure.

Minneapolis-based AB CarVal Investors took control of the property in August in a $20 million credit bid after Wilbraham, Massachusetts-based Colony Hills Capital allegedly defaulted on the $65.2 million loan tied to the property, deed records show. RREAF partnered with Axonic Capital to buy it from AB CarVal Investors for an undisclosed price.

Colony Hills Capital bought the property in 2021 as multifamily investors swept through Texas, picking up aging apartment buildings, with plans to fix them up, raise rents and sell them at a profit. Interest rates blew up their business plans, and many of these investors started losing properties to foreclosure in 2024.

As another layer in this distressed multifamily sale, the former owner partnered with Maverick County Housing Finance Corporation (HFC) to get property tax breaks on the property, using a loophole known as a “traveling” housing finance corporation. Colony Hills Capital sold the property to Maverick County HFC, an affordable housing organization 330 miles from Houston, and leased the ground.

In the 2025 legislative session, Gov. Greg Abbott signed a bill closing the loophole, which became a popular cost-cutting tool for multifamily syndicators and investors. Some municipalities took the passage of HB 21 as justification to revoke property tax credits for these deals, although the law provides operators time to come into compliance.

The loss of these tax credits has exacerbated the wave of distress hitting Texas multifamily properties. Houston has been hit particularly hard; for the last year, Houston multifamily projects have made up the majority of loans tied to commercial real estate that hit the foreclosure auction block in Texas. In January, troubled Houston multifamily loans made up $198 million of the $826 million tied to properties across the Texas Triangle headed to auction, according to Roddy’s Foreclosure Listing Service.

RREAF is picking up where Colony Hills Capital left off.

The new owner plans to rebrand the property built in 1995 as Aura Westchase, with 37 percent of units scheduled for renovation this year. The revamp will also include new signage and upgraded amenities.

The purchase adds to RREAF’s 2,000-unit Houston multifamily portfolio. It was RREAF’s third distressed multifamily purchase of 2025 and its first purchase with Axonic Capital, according to the release.