Harbor Group Spends $131M on Four-Property Multi-Family Portfolio in Nashville

Harbor Group International added a four-property portfolio in Nashville to its multi-family collection. The latest purchase is not the end for HGI, which vows to continue pursuing apartment portfolio buys.

Harbor Group International continues its multi-family shopping spree this year, picking up a four-property portfolio with a total of 1,593 apartments in Nashville, Tenn., for $130.5 million.

The purchase comes about two months after HGI acquired a three-property multi-family portfolio in Florida for $99.7 million.

The Nashville portfolio consists of Cherry Creek–627 units; Arbors of Brentwood–346 units; Cambridge at Hickory Hollow–360 units; and Preakness–260 units. HGI plans to spend nearly $4.7 million, or about $2,900 per unit, on various exterior and interior upgrades.

“The acquisition of the portfolio continues HGI’s proven strategy of acquiring well-located apartment portfolios with value-add and operational upside in improving markets,” said HGI president T. Richard Litton. “All four properties have occupancy rates above 90 percent and are poised to realize increased revenues as we implement our capital program and the Nashville market continues to improve.”

Litton said HGI “has a long and successful investment history in the Nashville market, and we look forward to meeting our investment objectives.”

The Norfolk, Va.-based private real estate and management firm also owns the Lakes of Bellevue, a 624-unit apartment complex in Nashville.

The Nashville multi-family market has rebounded to pre-recessionary levels in occupancy and rents, according to the CBRE 2012 Market Outlook for the city. Occupancy is averaging 95.2 percent for all asset classes and average asking rents have risen to $821, growing nearly 12 percent from 2009. CBRE cited an improving job market, high demand for a limited supply and reduced homeownership rates for the uptick in multi-family. Just over 1,000 units were built in 2011. That number has nearly tripled this year, with about 2,700 units under construction, according to CBRE. The services firm added that all of Nashville’s submarkets were showing improvement.

Dave Gutting, Derrick Bloom and Vince Lefler of Jones Lang LaSalle Inc. acted as brokers for the unidentified seller of the Nashville portfolio.

In the last 15 months, HGI has acquired four apartment portfolios. Besides the Florida apartment communities, the firm also purchased a 1,984-unit in metro Baltimore and a 2,500-unit portfolio in southeastern Virginia.

Noting the company’s equity resources and strong track record with similar acquisitions, Litton added that HGI will continue to aggressively pursue more apartment portfolio purchases.

HGI, which also has offices in New York City and Tel Aviv, controls a worldwide portfolio valued at more than $3.4 billion. Its real estate holdings include more than 8 million square feet of commercial space and approximately 23,000 apartment units.