HGI, CBRE IM Acquire 4 Boston-Area Assets
This is one of the largest multifamily deals to take place in the region this year.
In its first joint venture, affiliates of Harbor Group International and CBRE Investment Management have closed on four of five multifamily properties in a planned transaction with Apartment Investment and Management Co. for a total trade of $740 million. The portfolio has a total of 2,719 units across New England.
The properties are concentrated around the Boston metro with assets in Massachusetts, New Hampshire and Rhode Island. It is one of the largest multifamily trades in New England this year and reflects the strength of the region’s rental market, according to HGI.
The four assets that changed hands are Waterford Village a 588-unit property located in Bridgewater, Mass, the 492-unit Royal Crest Estates in Warwick, R.I., Royal Crest Estates a 473-unit community in Marlborough, Mass and Wexford Village, a 264-unit asset in Worcester, Mass.
With this acquisition, HGI owns and manages more than 3,600 units in the Boston area and has executed approximately $2.2 billion in multifamily acquisitions so far this year.
HGI announced in early last month that it had entered into a definitive agreement to acquire the New England assets. The acquisition of the fifth property – Royal Crest Estates in Nashua, N.H., – is expected to finalize later this year. The 902-unit property was completed in two phases in 1970 and 1974 and encompasses 49-three-story buildings. According to Yardi Research Data, Aimco acquired the asset in August 2002 from John Flatley Co. in a portfolio transaction The property has studio, one- and two-bedroom floorplans ranging between 300 and 1,300 square feet.
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Aimco, a Denver-based multifamily REIT, said in its second-quarter earnings report last month that the company had focused on creating value during the first half of the year. Part of that plan included actively exploring opportunities to unlock value for shareholders through strategic transactions including the suburban Boston portfolio sale. Aimco is also under contract to sell its Brickell Assemblage in Miami, which includes The Yacht Club Apartments and the adjacent 1001 Brickell Bay Drive office building, for $520 million later this year.
Aimco stated that its remaining portfolio will include 18 apartment communities containing 3,457 units. Their holdings be primarily concentrated in suburban Chicago and the Washington, D.C. Metro.
Boston portfolio highlights
HGI stated that the five properties were built between 1970 and 1974. Units include stainless steel appliances and hardwood flooring, in addition to amenities including swimming pools, fitness centers, clubhouses and community green spaces. As of July, the portfolio was 95.7 percent occupied. Historical occupancy has averaged 97 percent since 2022, reflecting consistent resident demand. The properties are situated within fundamentally strong suburban submarkets supporting long-term occupancy, according to HGI.
HGI plans to implement a value-add program across the properties through targeted renovations and an active asset management strategy.
Yisroel Berg, chief investment officer of multifamily at HGI, said in prepared remarks that the areas where the properties are located have limited new supply, enabling the new owners to leverage their local market knowledge to maintain stable occupancy levels and implement the planned renovations. Berg added that the New England region continues to demonstrate some of the strongest multifamily fundamentals in the country.
Matt Tepper, head of Americas, Indirect Real Estate Strategies at CBRE Investment Management, said in a prepared statement the acquisition exemplifies the firm’s strategy of investing in attainable and high-quality multifamily assets in markets supported by strong demand drivers.
Earlier HGI deals
In February, affiliates of HGI acquired Livano Canyon Falls, a newly constructed 300-unit property in Northlake, Texas. The investment expanded HGI’s deep footprint in the Dallas-Fort Worth Metroplex, where it has owned nearly 40 properties throughout its history. The property is part of the larger Canyon Falls master-planned community, which covers 1,199 acres across Northlake, Argyle and Flower Mound, Texas.
In May, affiliates of HGI provided a $64 million senior bridge loan to a joint venture between Greystar Development and Crown Realty Group for Sunela, a newly-built 272-unit luxury community in Phoenix. The loan marked HGI’s 102nd multifamily bridge loan since establishing its whole lending platform in late 2020.
