Harbor Group closes first CLO with $558M in deals


Harbor Group International has closed commercial real estate
CLO with a $558 million aggregated deal balance as the investment firm
positions itself further to take advantage of rising demand for financing in a
post-COVID world.

The offering is comprised exclusively of bridge loans on multifamily assets across the United States.


“The close of our initial CLO marks a significant
progression for Harbor Group International as we grow our debt and alternatives
investment platform and adapt our business to meet changing market needs,”
said Richard Litton, president, HGI. “We intend to continue to leverage
our deep multifamily expertise to be a CLO manager and bridge lender on a
long-term basis.”

In 2020, HGI established its whole loan bridge lending
platform, originating senior mortgage loans for multifamily borrowers seeking
short-term financing for new construction and value-add assets. In addition to
the whole loan platform, HGI has been sourcing and managing debt investments
for more than a decade. The firm currently manages approximately $2.3 billion
of real estate debt investments, including whole loans, Freddie Mac structured
debt products, preferred equity investments and mezzanine loans.

“The CLO offering further establishes Harbor Group
International’s strong national reputation as a debt investor and reliable
source of financing to multifamily borrowers,” Litton added. “Our
deep industry relationships and broad market penetration across the U.S. continue
to allow us to generate strong transaction pipelines across the capital stack
for our investors.”

Goldman Sachs was the Sole Structuring Agent and Co-Lead
Manager for the CLO offering.  JP Morgan
and Amherst Pierpont served as Co-Managers.

After COVID dealt a blow to the CLO sector last summer, the
niche financing has bounced back, according to Bloomberg, with the pace of
deals doubling doubling from the same time in 2019.

Among firms responding to the growing investor demand for
the product, Blackstone recently began marketing a $1 billion CRE CLO, and
companies such as TPG Capital, Ready Capital Corp. and Benefit Street Partners
are among those that accessed the market in March, said Bloomberg.

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