CBRE Closes $441M Freddie Mac Loan for Sun Belt Multifamily Portfolio Buy

Affiliates of Harbor Group International (HGI) have sealed $441 million of acquisition financing for the purchase of an 11-property multifamily portfolio in the Sun Belt, Commercial Observer has learned.

CBRE originated the Freddie Mac-backed loan for HGI’s purchase of the 3,590-unit portfolio for $625 million from a joint venture involving David Werner, Onyx Partners and Carlton Associates. The 11 garden-style apartment communities are in South Carolina, Louisiana, Georgia and Tennessee. 

CBRE also negotiated the financing, with a capital markets and structured finance team consisting of Shawn Rosenthal, Jason Gaccione, Jake Salkovitz, Lauren Weinstein and Justin Helbling.

Rosenthal said HGI’s involvement with the deal was attractive from an underwriting perspective given the company’s strong track record of buying multifamily assets across the Southern U.S.

“Not many people can take on a $625 million portfolio, especially when they plan to spend a bunch of money to renovate and have a value-add business plan,” Rosenthal told CO. “We liked the deal because it was a very sophisticated client who was buying it and committing to spend a bunch of additional equity to improve the assets.”

The portfolio, which consists of properties built between 1996 and 2010, is 95 percent leased, according to CBRE. The properties are Reed Creek in Augusta, Ga.; Market Street Station in Aiken, Ga.; Lauren Ridge in Lexington, S.C.; Grandview at Lake Murray in Columbia, S.C.; Heights at Lake Murray in Irmo, S.C.; Reserve at Mill Creek in Florence, S.C.;  River Run in Spartanburg, S.C.; Promenade at Boiling Springs in Boiling Springs, S.C.; Knob Creek in Johnson City, Tenn.; Gates at Citiplace in Baton Rouge, La.; and The Saulet in New Orleans. 

“The addition of these communities deepens HGI’s presence within markets exhibiting robust multifamily fundamentals where we already have a strong operating footprint,” Yisroel Berg, chief investment officer of multifamily at HGI, said in a statement. “With limited new supply in the surrounding areas of each property, we are well-positioned to leverage our local market knowledge to support continued high occupancies and unlock rent growth opportunities.”

Andrew Coen can be reached at acoen@commercialobserver.com