Harbor Group International closes $558M loan obligation

Norfolk firm plans to manage CLOs, make bridge loans

Published May 23, 2021 by Beth JoJack

Norfolk-based real estate investment and management firm Harbor Group International LLC has closed a $558 million commercial real estate collateralized loan obligation (CRE CLO), the company announced Wednesday.

The deal, HGI 2021-FL1, is the firm’s first CRE CLO, which is a security backed by commercial real estate loans. HGI’s CRE CLO consists exclusively of bridge loans on multifamily assets across the United States.

“The close of our initial CLO marks a significant progression for Harbor Group International as we grow our debt and alternatives investment platform and adapt our business to meet changing market needs,” President Richard Litton said in a statement. “We intend to continue to leverage our deep multifamily expertise to be a CLO manager and bridge lender on a long-term basis.”

In 2020, HGI established a whole loan bridge-lending platform, originating senior mortgage loans for multifamily borrowers seeking short-term financing for new construction and value-add assets. For more than a decade, HGI has been sourcing and managing debt investments. The firm currently manages approximately $2.3 billion of real estate debt investments, including whole loans, Freddie Mac structured debt products, preferred equity investments and mezzanine loans.

“The CLO offering further establishes Harbor Group International’s strong national reputation as a debt investor and reliable source of financing to multifamily borrowers,” Litton said. “Our deep industry relationships and broad market penetration across the U.S. continue to allow us to generate strong transaction pipelines across the capital stack for our investors.”

The Goldman Sachs Group Inc. acted as the sole structuring agent and co-lead manager for the CLO offering. JPMorgan Chase & Co. and Amherst Pierpont Securities LLC served as co-managers.

HGI controls a portfolio of worldwide assets valued at $13.5 billion. The company’s real estate holdings include 4.3 million square feet of commercial properties and 48,000 apartment units.

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