$66M Off-Market Deal Nets 696-Unit Portfolio

BIRMINGHAM, AL-A little more than two years after acquiring Vista Apartments, Harbor Group International LLC has sold the 696-unit, three-property portfolio for $65.8 million. The class A complexes have gone to an affiliate of New Dawn Acquisition LLC in an off-market deal.

The just-sold package, developed between 1995 and 2000, is Vista Woods at 3801 Galleria Woods Dr., Vista Falls at 3851 Galleria Woods Dr. and Vista Hills at Galleria Woods Dr. Harbor Group acquired the trio in early 2005 for $50.32 million.

"We typically hold properties, on average, between four and five years. This is one that hit the income numbers more quickly on the investment cycle," Richard Litton, Harbor Group's president, tells GlobeSt.com. He adds that New Dawn had approached them about buying the assets, which are positioned about one mile from Riverchase Galleria Mall at 2000 Riverchase.

Litton credits the portfolio's success to minor capital improvements that Harbor Group had made. Likewise, he says market fundamentals, improving demand for multifamily product and barriers to entry helped to boost the income margin and asset values. "The area where these properties are located has a strong bias against multifamily development so there isn't competition from new properties," he says. The 93%-occupied portfolio contains one-, two- and three-bedroom units, averaging 1,065 sf.

The Norfolk, VA-based Harbor Capital owns one other multifamily asset in the Birmingham area, the 160-unit Alpine Village at 2071 Alpine Village. And, executives are now assessing whether or not Alpine Village should be brought to market too. Last fall, Harbor sold the 320-unit Mountain View Apartments at 3708 Lodge Dr. in Birmingham.

"Harbor Group is active in mid-market cities in the Southeast," Litton says. "We've nothing under contract or imminent in Birmingham right now, but it will remain an active market for us, both in office and multifamily."