Dealmaker: Harbor Group International Acquires $1.8B Multifamily Portfolio
Aragon Holdings LLC, Los Angeles, sold a 36-property apartment portfolio to Harbor Group International, Norfolk, Va., for $1.85 billion.
Real Capital Analytics called the transaction the largest multifamily sale since 2016 and the fifth-largest ever recorded in the U.S.
The portfolio totals 13,243 rental units in nine primary and secondary markets across eight states. Most properties are concentrated in Dallas/Fort Worth and Denver with other assets in Houston, San Antonio, Atlanta, Orlando, Phoenix, Salt Lake City, Albuquerque, St. Louis and Kansas City, Mo.
Newmark Knight Frank, New York, brokered the sale. NKF Executive Managing Director Zach Springer worked with Mac Crowther, Brad Goff, Terrance Hunt, Brian Murphy and Scott Ramey.
NKF’s Capital Markets Strategies and Multifamily Capital Markets groups secured the financing, led by Henry Stimler, Bill Weber and Matt Mense. They arranged approximately $1 billion of combined new financing in two separate pools, an NKF-originated fixed-rate loan with Freddie Mac and a short-term floating-rate loan arranged by Bank of America. Harbor Group assumed $400 million of Aragon existing debt.
NorthMarq Capital, Minneapolis, represented Aragon Holdings for debt assumptions and defeasance. Meridian Capital Group, New York, advised Harbor Group on the transaction.
Harbor Group said it plans to invest $90 million in property upgrades throughout the portfolio, including $51.5 million of in-unit renovations. Aragon plans to sell its entire apartment portfolio totaling 15,000 units in 12 cities and eight states. “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 Founder, Chairman and CEO Larison Clark.