Harbor Group gains local rentals
Real estate firm’s portfolio acquisition includes three suburban Houston apartment properties
Harbor Group International, a private real estate investment and management firm based in Norfolk, Va., has picked up three suburban Houston apartment properties totaling 1,659 units as part of a sizable multifamily portfolio acquisition.
Harbor acquired 36 apartment complexes in the Southern U.S. from Los Angeles-based Aragon Holdings, a private real estate investment and fund management company, in a $1.85 billion transaction, including debt, the companies announced.
The portfolio, totaling 13,243 units, is primarily concentrated in the Dallas/Fort Worth and the Denver areas, with other properties in Houston; San Antonio; Atlanta; Phoenix; Salt Lake City; St. Louis; Albuquerque, N.M.; Orlando, Fla.; and Kansas City, Mo. The acquisition boosts Harbor Group’s apartment holdings to 50,000 units.
“This transaction marks a significant step for HGI as we continue to grow our portfolio in lucrative markets and provide our investors with a strong, diversified portfolio,” Jordan Slone, CEO of Harbor Group, said in an announcement.
The deal included Waldon Pond at 12850 Whittington Drive in west Houston, the Villages at Meyerland at 8900 Chimney Rock in southwest Houston and Reserve at Windmill Lakes at 9810 Windmill Lakes Blvd. in southeast Houston.
The $1.85 billion price tag equates to nearly $140,000 per unit, which would place the total value of the Houston properties at about $232 million. About 12.5 percent of the units acquired are in Houston.
The deal represents the bulk of Aragon’s 15,000-unit portfolio across 12 cities, which was sold for $2 billion. Assembled over the last 10 years, the suburban two- and three-story properties are near employment centers, shopping and have easy access to transportation.
“We decided to sell our portfolio because we recognized that, in the present market conditions, the properties would have the greatest value in the hands of a ‘value-add’ operator,” said Aragon CEO Larison Clark. “Harbor Group targets value-add opportunities, making this an ideal transaction for both firms.”
Newmark Knight Frank mar
keted the properties for the seller and represented the buyer for the debt financing. NKF arranged approximately $1 billion of combined new financing, while $400 million of existing debt was assumed by Harbor Group.
“This was a landmark deal for us in terms of size and scope as we were able to work across all Newmark business lines” to achieve results for both the buyer and seller, said Anthony Orso, president of NKF’s Capital Markets Strategies group, in a separate announcement.
Harbor Group International plans to spend about $90 million upgrading the portfolio, which will be managed in-house by Harbor Group Management Co., according to NKF.
With offices in Norfolk, Va.; New York; Baltimore; Los Angeles; and Tel Aviv, Harbor Group International invests in and manages office, retail and multifamily properties. The company controls a global portfolio of assets valued at $12.5 billion.