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Harbor Group closes first CLO with $558M in deals

Harbor Group International has closed commercial real estate CLO with a $558 million aggregated deal balance as the investment firm positions itself further to take advantage of rising demand for financing in a post-COVID world.

The offering is comprised exclusively of bridge loans on multifamily assets across the United States.

RICHARD LITTON

“The close of our initial CLO marks a significant progression for Harbor Group International as we grow our debt and alternatives investment platform and adapt our business to meet changing market needs,” said Richard Litton, president, HGI. “We intend to continue to leverage our deep multifamily expertise to be a CLO manager and bridge lender on a long-term basis.”

In 2020, HGI established its whole loan bridge lending platform, originating senior mortgage loans for multifamily borrowers seeking short-term financing for new construction and value-add assets. In addition to the whole loan platform, HGI has been sourcing and managing debt investments for more than a decade. The firm currently manages approximately $2.3 billion of real estate debt investments, including whole loans, Freddie Mac structured debt products, preferred equity investments and mezzanine loans.

“The CLO offering further establishes Harbor Group International’s strong national reputation as a debt investor and reliable source of financing to multifamily borrowers,” Litton added. “Our deep industry relationships and broad market penetration across the U.S. continue to allow us to generate strong transaction pipelines across the capital stack for our investors.”

Goldman Sachs was the Sole Structuring Agent and Co-Lead Manager for the CLO offering.  JP Morgan and Amherst Pierpont served as Co-Managers.

After COVID dealt a blow to the CLO sector last summer, the niche financing has bounced back, according to Bloomberg, with the pace of deals doubling doubling from the same time in 2019.

Among firms responding to the growing investor demand for the product, Blackstone recently began marketing a $1 billion CRE CLO, and companies such as TPG Capital, Ready Capital Corp. and Benefit Street Partners are among those that accessed the market in March, said Bloomberg.

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