Harbor Group Makes $10M Equity Investment in Apartment Portfolio

By Dees Stribling, Contributing Editor

St. Louis—Harbor Group International LLC has made a $10 million preferred equity investment in a multifamily portfolio in northwest suburban St. Louis. The portfolio consists of four properties totaling 1,447 units.

Three of the four properties are in the affluent Creve Coeur submarket, where average household income is about $100,000 per year, according to Harbor Group. Average occupancy for the portfolio is currently 95.5 percent.

The properties include the 276-unit Cove West and the 591-unit Cross Creek (renamed Waterfront Crossing), both in Creve Coeur, as well as the 420-unit Cedar Lakes in Lake St. Louis and the 160-unit Westchase in St. Louis. All of the properties date from the 1970s and ’80s

An affiliate of L3C Capital Partners LLC was the buyer of the portfolio, paying about $115.1 million all together, in one of the largest multifamily trades in Missouri in 2012. The buyer has retained Village Green as construction manager to undertake more than $8 million in renovations and upgrades to the properties. Village Green manages about 4,000 apartment units in metro St. Louis and is active in other markets.

Harbor Group chairman and CEO Jordan E. Stone says that the acquisition is part of a strategy to diversify its holdings with alternative options for its investors, including preferred equity. “The initiative began with the economic downturn in the credit industry and [we have] been successful in preferred equity investments thus far,” Stone notes. Currently Harbor Group’s real estate holdings include about 8.5 million square feet of commercial space and more than 23,000 apartment units.