NORFOLK, VA—Harbor Group International has increased its investment portfolio by more than a third with a single mega-transaction, its largest to date. The Norfolk, VA-based investment and management firm said Friday it had acquired a 25-property multifamily portfolio from affiliates of Lone Star Funds for $1.8 billion, bringing its total porfolio from about $5.2 billion to $7.1 billion.
Totaling 9,677 units, the properties are located in the Washington, DC metro area, Philadelphia, Baltimore, Chicago and Boston. A common theme across the portfolio is supply-constrained infill markets, each with solid demographics, convenient transportation, access to highways and desirable school districts.
“HGI was selected to acquire this portfolio due to the company's strong track record with complicated portfolio transactions,” says Jordan Slone, chairman and CEO of HGI. He notes that the company was able “to quickly mobilize a large-scale due diligence effort and secure attractive financing with Freddie Mac and New York Community Bank. This acquisition propels HGI further up the rankings as one of the largest apartment owners in the country.” Its multifamily portfolio now runs to about 30,000 units.
Meridian Capital Group provided investment advisory and mortgage brokerage services to HGI, including the placement of approximately $512 million of fixed rate debt with New York Community Bank. In addition, Berkadia Commercial Mortgage provided $930 million of fixed- and floating-rate debt through Freddie Mac. Lone Star was represented by Eastdil Secured.
HGI plans to invest approximately $80 million to upgrade unit interiors, enhance property amenities and improve curb appeal. Average occupancy for the portfolio is approximately 95% and HGI believes its value-add initiatives and focused management will boost revenue.
NORFOLK, VA—Harbor Group International has increased its investment portfolio by more than a third with a single mega-transaction, its largest to date. The Norfolk, VA-based investment and management firm said Friday it had acquired a 25-property multifamily portfolio from affiliates of Lone Star Funds for $1.8 billion, bringing its total porfolio from about $5.2 billion to $7.1 billion.
Totaling 9,677 units, the properties are located in the Washington, DC metro area, Philadelphia, Baltimore, Chicago and Boston. A common theme across the portfolio is supply-constrained infill markets, each with solid demographics, convenient transportation, access to highways and desirable school districts.
“HGI was selected to acquire this portfolio due to the company's strong track record with complicated portfolio transactions,” says Jordan Slone, chairman and CEO of HGI. He notes that the company was able “to quickly mobilize a large-scale due diligence effort and secure attractive financing with
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
