Harbor Group Carves Out 518-Unit Inroad for $41M

KINGWOOD, TX-An investment group from Virginia has closed on its first acquisition in the metro, taking the 518-unit Town Center Apartments for $40.5 million. Chicago-based Equity Residential Properties Trust is the seller of the 95%-leased complex, part of a long disposition list for Texas.

Harbor Group International LLC is planning an additional $2,300 per door investment to freshen up the complex at 2727 Ben's Branch Dr. "This is a relatively new, very well-maintained asset so we're not envisioning any major capital program on the exterior," says T. Richard Litton Jr., president of the Norfolk-based company.

Litton says Town Center offers positive upside due to the market's fundamentals. Additionally, those fundamentals of employment and job growth mean Harbor Group is seeking additional investments.

"We'll continue to invest a lot of time in the market and would love to buy several more properties there this year," Litton tells GlobeSt.com. "From an operational and efficiency standpoint, we wouldn't have bought this one and this one alone."

Litton says the desired asset profile is class A and B-plus assets for an average four-year hold. The target submarket is West Houston, particularly the Energy Corridor, he says. "We focused on Dallas a couple of years ago in the same way and ended up with five deals there within a year and a half," Litton adds. "I wouldn't be surprised if we had that in Houston a year from now."

Situated on 20.33 acres, Town Center Apartments was built between 1994 and 1999. The complex has one-, two- and three-bedroom units averaging 877 sf. The rent is 94 cents per sf.

Harbor Group, which had an in-house broker negotiating the deal, also will manage and lease the complex. CB Richard Ellis senior vice president Todd Stewart was the lead broker for the seller's team, which included executive vice president Craig LaFollette, senior vice president Todd Marix and senior associate Tre Banks.