Harbor Group acquires $309M multifamily portfolio

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Harbor Group International (HGI) has acquired an eight-property
multifamily portfolio for a JV of McDowell Properties and Angelo Gordon for
$309 million.

Know as The Southern Piedmont Portfolio, the package
includes 2,322 units spread across suburban submarkets in North Carolina and
Virginia.

HGI plans a $13 million capital expenditure program to upgrade and modernize the properties, which has an average vintage in the early 1990s, with about 71 percent of the garden-style units featuring classic or lightly renovated finishes.

A team from Newmark that included John Heimburger, Christine
Espenshade, Dean Smith, Sean Wood, Alex Okulski, Jason Kon and John Munroe were
the sole brokers on the transaction.

The firm’s Multifamily Capital Markets Debt & Structured
Finance team of Henry Stimler, Bill Weber and Matthew Mense, and Daniel
Sarsfield secured a $241,446,000 portfolio of floating-rate loans from Freddie
Mac on behalf of HGI.

According to Stimler, the portfolio’s workforce housing component
made the financing attractive to Freddie Mac as the agency continues to support
affordable housing as part of its mission statement.

“The Southern Piedmont Portfolio received interest from a
deep pool of domestic and international capital sources: the scale of the
opportunity, the unit renovation upside and the strength of the rental market
fundamentals in the properties’ MSAs all galvanized buyer interest in this
portfolio,” said Heimburger.

“HGI’s track record of portfolio execution success and
strong desire to re-enter the Carolinas multifamily market gave us confidence
in their ability to close the transaction on time at the contracted price.”

The portfolio consists of Harlowe Apartments and The Residences at West Mint in Charlotte (pictured top) 200 Braehill, Corners at Crystal Lake, and Mill Creek Flats in Winston-Salem, 7029 West in Greensboro and Woodlake Reserve in Durham and The Samuel in Hampton, VA.

Corners at Crystal Lake

The assets extend across high-growth and resilient markets
with each offering proximity to major employment drivers, in addition to an
abundance of easily accessible retail.

The acquisition is in line with the Harbor Group’s strategy of expanding its national footprint.

Last year, the company acquired 36 apartment properties
comprising of 13,243 units from Aragon for $1.85 billion – the 5th largest
apartment portfolio sale ever.

Newmark also quarterbacked that transaction. Said Stimler, “We
are grateful to continue to foster our very strong relationship between Newmark
and HGI, on both the sale side and the financing side.

“Our team strives to ensure that HGI can seamlessly acquire
portfolio-sized transactions like Piedmont and last year’s $2 billion Aragon
Portfolio to build out their national brand.”

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