Harbor Group International paid $625M for 3,590 Sun Belt apartment units.
The privately managed global real estate investment firm acquired 11 properties across South Carolina, Louisiana, Georgia and Tennessee that were built between 1996 and 2010. The sale breaks down to roughly $174K per door at the properties, which are 95% occupied.
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The seller was a joint venture between real estate investor David Werner, New Jersey-based asset management firm Onyx Partners and New York-based Carlton Associates.
The transaction was first reported by Real Estate Alert and included in a J.P. Morgan transaction roundup shared with investors in late May. The garden-style apartment complexes were 95% occupied at the time of the sale, according to the note.
Norfolk, Virginia-based HGI, which manages a roughly $20B portfolio that includes 57,000 apartments, retail and office space, has actively managed its portfolio in recent months while other well-capitalized firms have sat on the sidelines.
CEO Jordan Slone said at a Bisnow event in November 2023 that struggling property owners were bringing offers to them.
"Our team, from everything to our acquisitions group to our property management and asset management teams, they are flooded with deals right now that are distressed," he said at the time.
Last month, the investment firm paid $182M for a 390-unit apartment building in Needham, Massachusetts. It purchased a 352-unit property in Reston, Virginia, for $133M in August. Last February, it provided preferred equity as part of a $420M refinancing package for an 85-story office tower in Miami’s financial district.
It has also shed several assets, including a 778-unit portfolio outside Atlanta, the $221M sale of apartments in Waltham, Massachusetts, and a 258-unit property in Alexandria, Virginia.
The investment firm took over ownership in September of a 623-unit property in Atlanta after foreclosing on its $105M loan for the property.
The trades occurred as investors and analysts debate the health of the multifamily sector. A wave of pandemic-era demand set off a construction boom that was leading to record deliveries by late 2024 and threatening to weigh down rent growth.
Fears of oversupply loomed over developers, private owners and REITs in the back half of last year. But most markets have absorbed the rush of new supply. The high cost of construction today, along with supply fears, has led to fewer multifamily starts, and investors are increasingly bullish that bargaining power will soon be back in the hands of landlords.
Some analysts saw early signs of a recovery after Blackstone paid$10B for apartment owner AIR Communities last April. The first quarter of 2025 also outperformed last year, with $30B in multifamily sales.
A recent Berkadia survey found that 83% of multifamily investors planned to expand their portfolios in 2025 while just 2% were planning sales.
“The little bit of our canary in the coal mine is our investment sales business, and that group seems to be incredibly busy right now,” Ernie Katai, Berkadia head of production for mortgage banking, told Bisnow in March.
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