Harbor Group, Cammeby’s Acquire NJ Portfolio for $1B

The assets are located primarily in key suburban markets near major employers.

Waters Edge at Rahway. Image courtesy of Harbor Group International 

A joint venture between affiliates of Harbor Group International and Cammeby’s International Group has acquired a 41-property multifamily portfolio totaling 5,302 units throughout New Jersey from an undisclosed private seller for $1.05 billion.

The portfolio of workforce housing properties spans 14 cities in North, Central and South New Jersey with a concentration in Union, Morris and Essex counties. Most of the assets are located in key suburban markets near major New Jersey employers including Prudential Financial, Johnson & Johnson, Bayer Corp. and Quest Diagnostics. The properties are also accessible to other employment hubs including New York City and Philadelphia.

Among the properties are Water’s Edge of Rahway and River Place at Rahway, both in Rahway, N.J.; Ford Hill Terrace Apartments in Morristown, N.J.; and Brakeley Gardens in Phillipsburg, N.J.

Eastdil Secured brokered the transaction and advised on the debt alongside Meridian Capital Group. Lawrence Bryant at Williams Mullen served as counsel to HGI and Steven Fleissig at Greenberg Traurig served as counsel to the seller.

Abe Hirsch, senior managing director at Meridian, said in prepared remarks the group worked with Capital One and Freddie Mac to secure a combination of fixed- and floating-rate financing to provide optimal flexibility in the short-term while allowing the buyers to achieve their long-term goals for the assets. Further details on the financing were not disclosed.

HGI will invest approximately $46 million in capital improvements and enhancements across the portfolio. The firm plans to renovate about 50 percent of the interior units and invest in operational improvements throughout the portfolio. Harbor Group Management Co., HGI’s property management arm that was recently named one of the top 10 Fastest Growing Multifamily Property Management Firms by Multi-Housing News, will assume management of 10 of the assets.

Major Moves

This isn’t HGI’s first billion-dollar multifamily purchase. In what was called one of the largest apartment portfolio deals ever, HGI acquired a 36-property multifamily portfolio for $1.8 billion from Aragon Holdings in January 2020. Most of the properties were in the South and Sunbelt regions.

Richard Litton, HGI president, said in a prepared statement the acquisition of the New Jersey portfolio represents the type of large-scale opportunities HGI identifies for its investors. He said the portfolio offers significant value-add potential and a mark-to-market opportunity due to the growing demand for housing outside large urban cities. Litton cited Cammeby’s strong presence in the region and said it was good to have an experienced JV partner.

Cammeby’s, a privately held real estate company with a portfolio of industrial, office and residential real estate assets in 14 states, owns numerous multifamily properties in the New York and New Jersey area. In 2019, Cammeby’s acquired a six-property portfolio of apartment communities in Northern New Jersey with more than 1,800 units. The assets were located in Essex and Bergen counties.

Earlier this summer, HGI continued adding to its multifamily portfolio of 53,000 units in the U.S. and U.K. with the purchase of The Olive Ridge Resort, a 220-unit garden-style apartment community in Pomona, Calif., for $46.8 million from Positive Investments. Also in June, affiliates of HGI acquired The Royal Athena, a 275-unit Class A multifamily community in Bala Cynwyd, Pa., from PGIM Real Estate for $59.5 million.

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