Harbor Group International announced that an affiliate of the company funded a $35 million, nine percent mezzanine loan in connection with the purchase of a 15-property portfolio of multifamily properties, primarily in Brooklyn.
The portfolio was acquired for $236 million by a long-standing Brooklyn multifamily operator and investor that contributed approximately $38 million of equity in the transaction.
“Mezzanine loans and preferred equity transactions have become a an increasingly important component of HGI’s diverse investment strategy,” said T. Richard Litton, Jr., president of Harbor Group International.
“We continue to actively pursue these types of opportunities with quality sponsors and operators.”
Fourteen of the properties are located in two distinct neighborhoods of Brooklyn, comprising seven in the Midwood section; and seven in East Flatbush. The one remaining property is in
Staten Island. Current occupancy for the entire Portfolio is above 98%.
Eastern Consolidated arranged the sale of the property known as the Kings Portfolio with Peter Rebenwurzel of Coney Realty Group and David Malek of Malek Management acquiring the 15-property rental portfolio from Urban American.
The two largest buildings in the portfolio are a 178-unit property at 2425 Nostrand Avenue in Midwood in Brooklyn, and a 176-unit complex at 2838-2868 Hylan Boulevard in Staten Island’s Oakwood neighborhood.
“There is staggering demand for these units,” said Eastern Consolidated principal Lieberman.
“While the portfolio as a whole exhibits tremendously strong performance, rents remain materially below market by roughly 25 to 30 percent or greater in select cases. Coney Realty Group and Malek Management are well positioned to populate all of the units at full legal rents, maximizing on their investment.”