The past 24 to 36+/- months have been amongst the most challenging periods the real estate housing market has experienced in recent history. Higher interest rates, tighter credit conditions, heightened operational expenses, and reduced transaction volume required patience, discipline, and thoughtful execution across all facets of the business. Throughout this environment, our focus at Topaz remained consistent: prudent capital stewardship, operational execution, and positioning the platform for longer-term value creation.
Despite a selective market, 2025 was a constructive year for Topaz. We successfully navigated the capital markets through the refinancing of Grove, extending maturities and strengthening the capital structure at a time when financing options were constrained. We also completed the sale of Gardens at disciplined pricing, validating asset-level business plans and generating liquidity in a selective environment. Operationally, targeted asset management initiatives across the portfolio drove average revenue and NOI growth of approximately 6% year-over-year, despite a volatile macro backdrop. In parallel, we expanded our platform with the acquisition of a build-to-rent / single-family rental community, further diversifying our housing exposure and complementing our multifamily low/mid-rise core.
Looking ahead to 2026, our active deal pipeline spans multifamily, townhome, and single-family rental / build-to-rent communities across a number of high-conviction Florida markets and submarkets. We continue to gravitate toward newer-built product and generally shy away from pre-1990s vintage assets, placing a premium on construction quality, durability, and unique property-specific characteristics that differentiate assets from their competitive set and the broader market.
Our investment approach is centered on longer-term ownership. We typically underwrite to average hold periods of five to seven years, allowing sufficient time to execute business plans and benefit from operational improvements. In select situations—particularly assets with durable, growing cash flows—we may extend hold periods closer to seven to ten years, supported by fixed-rate, long-term, and well-aligned debt structures. We believe this approach enhances risk-adjusted returns, reduces refinancing risk, and aligns capital structures with the long-term nature of housing fundamentals.
Operational excellence remains a key differentiator. Over the past year, we successfully increased tenant retention by more than 15% and decreased our insurance premiums on average by 17% on a portfolio-wide basis, reflecting improvements in resident experience, on-site operations, and asset-level decision-making. We are also proud to partner with leading property technology platforms, including SymmetRE, CoSign, and others, which are helping us enhance leasing efficiency, resident quality, asset management and business intelligence, and overall portfolio performance.
Florida housing remains one of the most compelling risk-adjusted real estate opportunities in one of, if not the most, impressive economic output and in-migration growth states in U.S. Durable population and employment growth, limited new supply, and elevated replacement costs continue to support our conviction. While workforce and attainable housing remain central to our strategy, we also expect to selectively pursue quasi-luxury housing opportunities in high-growth submarkets where strong demand, constrained supply, and attractive basis create compelling risk-adjusted return profiles. In all cases, our underwriting remains disciplined and fundamentals-driven.
As capital markets reopen and institutional capital selectively reengages, we view 2026–2027 as an early recovery period driven by operational strength, thoughtful execution, and disciplined underwriting rather than broad-based speculation with significantly more visibility.
Our strategy remains unchanged. We will continue to focus on conservative capital structures, active asset management, and long-term ownership across multifamily, build-to-rent (townhomes/cottages/single families), and selectively chosen luxury housing opportunities in Florida. We believe this approach positions our investors and partners to benefit from durable cash flow, downside protection, and long-term value creation across market cycles.
We are grateful for your continued trust, collaboration, and partnership, and we look forward to the year ahead.
Wishing you and your families a healthy and successful New Year.
Best regards,
Marc & Etan
Managing Partners
Topaz Capital Group
www.TopazCG.com
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