RREAF Holdings has acquired 2828 at Royal Oaks, a 510-unit garden-style apartment complex located at 2828 Hayes Road in Houston’s Westchase neighborhood. The Dallas-based investment firm purchased the property after its previous owner lost it to foreclosure.
According to deed records, AB CarVal Investors, based in Minneapolis, took control of the property in August through a $20 million credit bid. This followed an alleged default by Colony Hills Capital of Wilbraham, Massachusetts, on a $65.2 million loan associated with the property. RREAF partnered with Axonic Capital to acquire the complex from AB CarVal Investors for an undisclosed amount.
Colony Hills Capital had bought the complex in 2021 during a period when multifamily investors were acquiring older apartment buildings across Texas with plans to renovate and increase rents before selling for profit. However, rising interest rates disrupted these business strategies, leading many owners to lose properties through foreclosure beginning in 2024.
The transaction also involved Maverick County Housing Finance Corporation (HFC), which provided property tax breaks using what is known as a “traveling” housing finance corporation loophole. Colony Hills Capital sold the asset to Maverick County HFC—an affordable housing group located over 300 miles from Houston—and leased back the ground rights.
In response to this practice, Governor Greg Abbott signed legislation during the 2025 session that closed this loophole. Some municipalities have since used House Bill 21 as grounds to revoke tax credits for such deals, though operators are allowed time to comply with the new law.
The removal of these tax benefits has contributed further distress among Texas multifamily properties. In Houston specifically, multifamily projects have dominated commercial real estate foreclosures over the past year. As of January, troubled loans tied to Houston apartments accounted for $198 million out of $826 million in distressed properties set for auction across major Texas cities (source: Roddy’s Foreclosure Listing Service).
RREAF intends to rebrand the property as Aura Westchase and plans renovations on 37 percent of units within this year. The improvements will include new signage and upgraded amenities.
This acquisition expands RREAF’s portfolio in Houston to about 2,000 units and marks its third purchase of distressed multifamily assets in 2025—the first alongside Axonic Capital.
