Westwood-based Aragon Holdings has sold a portfolio of 36 apartment properties for $1.85 billion to Norfolk, Va.-based Harbor Group International.
The deal, spanning 36 properties and encompassing 13,243 units, is one of the biggest ever for an apartment portfolio.
The sale was announced Jan. 15.
“It’s monumental,” said Larison Clark, founder, chairman and chief executive of Aragon Holdings. “The largest multifamily transaction since 2016 and the fifth-largest ever. That’s a big deal.”
Clark, who founded Aragon Holdings as a private real estate investment and fund management company in 2008, said the time was right to make the deal.
“It’s the top of the market, and the only players that are buying these days have to be value-add and have to be able to improve this property somehow to make the property work,” Clark said.
The portfolio of properties stretches across several Sun Belt states, from Florida to Arizona. None are in California.
“The properties within this portfolio are in strong population growth markets with good employment drivers and overall good economic tailwinds,” Yisroel Berg, director of multifamily and managing director at Harbor Group, said in an email.
“The portfolio contains an attractive mix of markets where HGI already owns property in addition to new target markets for expansion,” Berg added.
The deal is part of Aragon Holdings’ sale of its entire $2 billion apartment portfolio. The company had sold a portion of its holdings prior to the Harbor Group transaction.
Clark said Aragon Holdings’ first batch of properties had mortgages coming due so the company sold them last year while seeking a buyer for the remaining portion of its portfolio.
Aragon Holdings said the suburban two- and three-story properties in the portfolio average 350 units each. Most are located near employment and transportation centers.
Harbor Group’s Berg said the company, “plans to invest a minimum of $90 million into the portfolio for a capital improvement and enhancement plan, equating to more than $6,000 per unit.”
Dean Zander, an executive vice president at CBRE Group Inc., said the deal reflects the heightened demand for multifamily properties nationwide.
“We’re definitely still in an environment where multifamily is leading the pack as far as desirability from investors,” he said.
“(Aragon has been) in an acquisition mode since the middle of the 2000s and opportunistically looked around and saw they could refinance or sell at pretty attractive levels and let someone else take the properties to the next level,” Zander added. “It was well timed for them, and Harbor will do great with them.”
Newmark Knight Frank represented Aragon Holdings and helped secure debt financing for Harbor Group in the sale.
NorthMarq Capital represented the seller for debt assumptions and defeasance. Meridian Capital Group advised the buyer.
Hanes Properties LLC, a Los Angeles-based real estate investment and management firm, has purchased Golden Sands, a 120-unit apartment complex in Victorville, for $14.25 mil ($118.8k/unit). The complex, located on just over eight acres at 15930 Nisquali Rd, was sold by Los Angeles-based real estate and property management firm Positive Investments.
The apartment community consists of 96 two-bedroom units and 24 one-bedroom units. The buyer plans to completely renovate the asset in 2020 with major enhancements to five large courtyards to include a 50-person gazebo, two large pavilions, cabanas at two pool/spa locations, a playground and tot lot, and a 77 fruit tree orchard-maze and sport court.
John Montakab, Stew Weston, and Dean Zander of CBRE represented Positive Investments in the deal. The listing received multiple offers from a variety of buyers, including private investors, exchange buyers and fund advisors. The property ended up selling at the highest price per unit for a building of this size in the city, according to CBRE