Harbor Group Secures $440M to Refinance 25 Multifamily Properties

Having strong relationships with lenders and knowing your market niche can make a difference in landing favorable terms, even in the current lending environment. 

Harbor Group International has secured $440 million to refinance 25 multifamily properties it owns across the country, and credits these factors for its new fixed rate financing.

The loans were arranged through KKR, Freddie Mac and Fannie Mae. Freddie Mac via Berkadalia provided $44 million for eight assets totaling 915 units in its Empire Portfolio in Indianapolis. Freddie Mac via Capital One and Meridian Capital provided $73 million for a nine-asset portfolio of 1,119 units in its Florida Cardinal Portfolio. KKR provided $122 million for one asset of 908 units in its Alesio Urban Center in Dallas. And Freddie Mac via Newmark loaned $201 million for seven assets totaling 2,322 units in its Southeast Piedmont Portfolio.

The refis consist of mid-to-long range fixed rate debt, with some prepayment flexibility and without investing any additional capital. “HGI has found the right balance of debt to match the tailored business plans for each property, allowing the firm to maximize the value of its assets across the country,” Pete Petron, Managing Director of HGI and Head of Asset Management, said in prepared remarks.

Lane Shea, HGI’s Managing Director explained that “HGI’s relationship with lenders such as KKR, Freddie Mae and Fannie Mae has allowed us to successfully navigate various market cycles.” Lane also credits the company’s knowledge of the multifamily market and its strategic use of leverage, allowing it to “secure debt capital despite tighter lending conditions.”

Moreover, it accomplished this transaction at a time when banks’ lines are drying up and GSE lending is said to offer only a limited buffer, according to a GlobeSt.com report earlier this month, which noted that bank holdings of multifamily debt dropped $15 billion in March. 

Separately, HGI has pursued other opportunities, such as its acquisition of Mezzo, a multifamily property in Aubrey, Texas, a city of 5,000 in Denton County, and invested in the ground-up development of Springside Middletown, a 240-unit Class A multifamily community in the city of Middletown, Conn., home of Wesleyan University.

The Norfolk, Va.-based company, which also has offices in New York, Los Angeles, Baltimore and Tel Aviv, has a portfolio with $20 billion in real estate assets, which includes a total of 59,000 apartment units in the U.S. and 5 million square feet of commercial space in this country and also in England.