EagleCap Newsletter – December 🦅
- Jarom A Pratt
- Jan 10
- 4 min read
November brought major momentum in both the Houston market and across our portfolio. From strong economic signals to being officially under contract on our next Texas acquisition, this month marked real progress. Below is a quick snapshot of what’s happening on the ground and what investors should be watching as we head into year-end.
Summary
Houston Is Booming
Corporate expansions and port growth push Houston to the top of national performance charts.
Pasadena 172 Update
Under contract and deep in due diligence. Early investor interest already filled initial soft commitment spots.
On-Site Insights
Our team walked every unit, roof, and system throughout Pasadena 172, confirming major value-add upside.
Cost Seg Wins
Bonus depreciation and cost segregation continue to drive large first-year deductions.
Retirement Investing Reminder
SDIRAs and Solo 401(k)s offer powerful tax-deferred or tax-free pathways into real estate.
The Avenues Progress
Renovations are back on schedule after a minor city delay. Only three units are left before full stabilization.
Funding Window Ahead
January funding period expected to fill fast! Soft commitments are encouraged before access fills.
Market Update
Houston’s Economic Engine Is Still Gaining Speed
Houston continues to show some of the strongest fundamentals in the country, powered by diversified employment, expanding corporate investment, and a tight, high-demand rental market.
Corporate Expansion Continues
Major employers are reinforcing Houston’s long-term stability:
Apple & Foxconn: Building a major AI server production facility opening in 2026.
United Airlines: Adding a 140,000 sq ft Ground Support facility and 91,000 sq ft Tech Ops Training Center to support growth through 2032.
These expansions strengthen the region’s job base and keep housing demand strong.
The Port of Houston Drives Massive Economic Impact
The port remains one of the most powerful economic engines in the U.S.:
#1 in the nation for foreign waterborne tonnage
67,000 direct jobs + 1.28 million indirect jobs
$439 billion annual economic impact (≈ 20% of Texas GDP)
Over $1B in infrastructure improvements in the past decade
This industrial and logistics strength supports long-term renter demand across multiple income segments.
Industrial & Petrochemical Stability
Houston’s core industries continue to provide recession-resistant employment:
ExxonMobil Baytown Complex: Contributes $7B+ annually
Bayport Container Terminal: Generates $1.6B per year and supports 32,000+ jobs
These anchors create consistent, durable demand for workforce housing.
Pasadena / Deer Park / La Porte: Tight Supply, Steady Rent Growth
This submarket continues to outperform broader Houston:
4.4% effective rent growth over the last two years
Rents hit a 24-month high in April 2025
Very limited new construction due to strict zoning and spacing rules
High demand + constrained supply = strong pricing power.
Livability & Connectivity Remain Strong
Residents benefit from:
Top-rated school districts
Access to parks and recreation
Major retail hubs (Fairway Plaza, Baybrook, Almeda)
Strong road connectivity to employment centers
These drivers support lower turnover and stable long-term occupancy.
Bottom Line
With broad economic diversification, massive industrial strength, and a supply-constrained submarket, Houston, especially Pasadena/Deer Park/La Porte, remains one of the nation’s most stable and compelling markets for long-term rental growth.
Investor Insights
Tax Advantages: Why Multifamily Is a Powerful Tool for Reducing Tax Burden
Multifamily real estate offers some of the strongest tax benefits available, and investing early in the year means investors can capture current-year deductions for the majority of the year.
Here are the big advantages:
1. Depreciation: Major Deductions Without Reducing Cash Flow
Multifamily qualifies for 27.5-year depreciation, creating “paper losses” that reduce taxable income while cash flow remains positive.
2. Cost Segregation = Accelerated First-Year Benefits
By breaking a building into shorter-life components, investors often capture large first-year deductions, especially with assets eligible for bonus depreciation (like the ones EagleCap buys).
3. Passive Losses Offset Passive Income
These depreciation losses can offset income from:
Other rentals
Passive K-1 income
Certain royalties or lending income
They carry forward indefinitely.
(They only offset W-2 or business income if you or a spouse qualify for REPS.)
4. Retirement Accounts Supercharge Real Estate Investing
Investing through an SDIRA or Solo 401(k):
Keeps depreciation inside the account
Grows gains tax-deferred (traditional) or tax-free (Roth)
Avoids UBIT in most Solo 401(k) structures
5. Powerful Exit Tools
Multifamily also offers:
1031 exchanges to defer gains
Step-up in basis to eliminate taxable gain for heirs
Depreciation recapture strategies
Loss carryforwards that unlock future tax savings
Why This Matters Now
The new year is fast approaching, and it pays to get started early to take full advantage of the tax benefits throughout the year.
If you want to explore whether these strategies may apply to your situation, learn more and get started here:
*This is not tax advice—always consult your CPA.
Deal Activity
The Avenues
Interior Progress
Unit 5 is nearly complete—just a few final punchlist items remain.
Unit 12 is underway, and with the efficiencies developed across the 14 units already renovated, our team is moving faster than ever.
Only three interiors remain to reach full completion: Units 5, 12, 2 & 3—all on track to be finished before Spring 2026.
Exterior Improvements
The new sprinkler system and sod prep are complete, giving the property a major boost in curb appeal.
Exterior renovations—including siding, paint, and cleanup—are just a few punchlist items away from full completion.
Looking Ahead
Pasadena Deal Progressing Quickly: We’re now under contract and moving through due diligence. Early interest has been very strong; reach out for more details.
Funding Window Coming Soon: In January, the funding period will begin. Investors who want access are encouraged to make a soft commitment because allocation spots are already filling quickly.
The Avenues Update: Renovations and exterior improvements are moving efficiently, keeping us on track for full stabilization by Spring 2026.
Thank you for following along: Your continued support allows us to pursue disciplined, high-return projects for you.
Merry Christmas,
The EagleCap Team
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