Ford Hill Terrace in Morristown — Courtesy: Harbor Group International
By Joshua Burd
An investment group has acquired more than 5,300 apartments in the state for a combined $1.05 billion, in a transaction that spans 14 cities in northern, central and southern New Jersey.
The joint venture, which includes affiliates of Harbor Group International LLC and Cammeby’s International Group, said the portfolio consists of 41 workforce housing communities totaling 5,302 units. HGI now plans to spend roughly $46 million on renovations and enhancements across the properties, the locations of which were not disclosed.
“As we continue to expand our investment platform, the acquisition of the Garden State portfolio represents the large-scale, attractive opportunities Harbor Group International identifies for our investors,” HGI President Richard Litton said. “This portfolio offers significant value-add potential and mark-to-market opportunity amid growing demand for housing outside of large urban cities. We are pleased to have an experienced partner in Cammeby’s as we embark on this venture, given their strong presence in the region.”
The investment firm did not identify the seller in its announcement Wednesday, although the portfolio includes properties affiliated with Salem Management, a family-owned, Union-based company founded more than 60 years ago. The firm’s website lists 41 properties in New Jersey, many of them garden-style and midrise apartments such as Brakeley Gardens in Lopatcong, Montclair Arms in Montclair and Barrett Country Club in the Kendall Park section of South Brunswick.
In a news release, the Norfolk, Virginia-based HGI said the portfolio is largely concentrated in Union, Morris and Essex counties, citing its proximity to major employers such as Prudential Financial, Johnson & Johnson, Bayer Corp. and Quest Diagnostics. The properties are also within commuting distance of New York City and Philadelphia.
Harbor Group Management Company, HGI’s property management arm, will assume the management of 10 assets within the portfolio, the news release said. As part of its investment, the company will renovate 50 percent of the interior units and invest in operational improvements throughout the portfolio.
Eastdil Secured brokered the transaction and advised on the debt alongside Meridian Capital Group. Lawrence H. Bryant at Williams Mullen served as counsel to HGI, while Steven Fleissig at Greenberg Traurig LLP served as counsel to the seller.
“On behalf of Meridian, it was again an honor and privilege to represent Harbor Group International and Cammeby’s International Group in negotiating financing for this monumental acquisition,” said Abe Hirsch, a senior managing director at Meridian. “Working in direct coordination with Capital One and Freddie Mac allowed us to secure a combination of fixed- and floating-rate financing that provided optimal flexibility in the short-term while allowing them to achieve their long-term goals for the assets.”
