Harbor Group International, a Norfolk, Virgina-based real estate investment and management firm, has raised $245 million for its U.S. multifamily whole loan platform. CPPIB Credit Investments, an affiliate of Canada Pension Plan Investment Board, led the initiative, committing $110 million.
NORFOLK, Va., Jan. 26, 2021 /PRNewswire/ — Harbor Group International, LLC (“HGI”), a privately-owned international real estate investment and management firm, and its affiliates, today announced the completion of a $245 million equity raise for HGI’s multifamily whole loan platform, which began originating and closing loans in 2020. Through the platform, HGI provides senior mortgage bridge financing on multifamily assets throughout the United States. Canada Pension Plan Investment Board (“CPP Investments”), through a wholly owned subsidiary of CPPIB Credit Investments Inc. (“CPPIB Credit”), committed $110 million of equity capital as the lead investor for the initiative.
HGI expects to close in excess of $300 million in multifamily senior loans by the end of January. As the platform continues to grow, HGI anticipates reaching an aggregate of $450 million to $500 million in loans by the end of the first quarter of 2021.
“At the start of the pandemic in 2020, liquidity constraints on other sources of debt capital created a window of opportunity to enter the bridge lending market,” said Richard Litton, President of HGI. “With a growing need from borrowers for reliable and committed lenders, and given HGI’s 35-year history as an operator and investor in the multifamily sector, the establishment of a senior loan origination business is a logical evolution for HGI. We are thrilled to have CPP Investments’ support as our lead investor as we grow our platform as well as our relationship and partnership with CPP Investments.”
In addition to its owned real estate portfolio, HGI has been sourcing and managing debt investments for more than a decade. The firm has made preferred equity investments and mezzanine loans on multifamily properties across the U.S. and is one of the largest buyers of Freddie Mac multifamily subordinated debt positions, or “B-pieces”. In 2019, HGI secured a $180 million investment commitment from CPPIB Credit to support Freddie Mac’s Supplemental Loan, or KJ, program.
“As a well-known owner and operator with a strong understanding of the U.S. multifamily market, HGI has the ability to approach lending transactions with a comprehensive perspective that gives them a unique advantage,” said Geoffrey Souter, Managing Director, Head of Real Assets Credit, CPP Investments. “We look forward to continuing our relationship with HGI to address a growing market need.”
The lending program will target value-add and new construction assets nationwide.
About Harbor Group International
Harbor Group International, LLC, including its affiliates, is a private real estate and real estate related investment and management firm which controls a portfolio of worldwide assets valued at $12.6 billion. HGI is headquartered in Norfolk, Virginia with offices in New York, Baltimore, Los Angeles and Tel Aviv. The company’s real estate holdings include 4.1 million square feet of commercial properties and 46,000 apartment units. For additional information, please visit www.harborgroupint.com.
About Canada Pension Plan Investment Board
Canada Pension Plan Investment Board (CPP Investments™) is a professional investment management organization that manages the Fund in the best interest of the more than 20 million contributors and beneficiaries of the Canada Pension Plan. In order to build diversified portfolios of assets, investments are made around the world in public equities, private equities, real estate, infrastructure and fixed income. Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York City, San Francisco, São Paulo and Sydney, CPP Investments is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. At September 30, 2020, the Fund totaled C$456.7 billion. For more information, please visit or follow us on LinkedIn, Facebook or Twitter.