Although Harbor Group International already owned thousands of units in Texas, company leaders saw a unique opportunity to add an additional 3,100 units to their footprint when a 12-property portfolio went up for sale.
Richard Litton Jr., president of Norfolk, Va.-based Harbor Group International, says seven of the properties in North Dallas were particularly appealing. And the additional three communities in other parts of Dallas and two in Houston only sweetened the deal.
“We’ve had a good experience in Dallas and Houston in occupancy and being able to push rents,” Litton says. “We wanted to deport more equity in those two markets. And we were able to do it in bulk with one transaction.”
CBRE brokered the deal when the Vancouver, Canada-based England Group decided to sell the portfolio. The terms of the deal were undisclosed. Before the transaction closed on Nov. 25, the company owned 4,300 units in the Lone Star state and recently sold 2,500 units.
The entire portfolio falls in the B range of asset classes, Litton says.
“They’re B to B+ properties in A locations,” he says.
And the company’s team is ready to renovate each newly acquired property with interior upgrades and some common-area amenity improvements. The plan is to use about $10 million to move the properties from B+ assets to the A- range.
And although the acquisition seems like a drop in the footprint bucket in such a large state, the company also owns property in San Antonio and recently sold a community in Austin. Litton says he’s still interested in those other cities for future acquisitions.
“Austin is a great market,” he says. “It’s been very competitive from a pricing standpoint. But it’s expensive enough that we felt there were better opportunities in Dallas and Houston.”