Harbor Group International has purchased an apartment tower in Koreatown, paying nearly $53 million less than it last traded for in 2014.
The Norfolk, Virginia-based investment firm and Image Capital bought the 464-unit complex at 3150 Wilshire Boulevard, the firm announced this week, declining to provide a purchase price. However, a source familiar with the deal pegged the sale at just north of $230 million.
Harbor Group used a $125 million loan from a consortium of Signature Bank and New York Community Bank to finance the purchase, the source added.
Principal Financial Group, which sold the property, lost on the deal. The insurance firm, based in Iowa, bought the property in 2014 for $283 million, according to property records filed with L.A. County.
To purchase the property, Principal used a $168 million loan with Freddie Mac. In June, the firm came to an agreement to extend the maturity on the debt through Oct. 1. Just before that deadline, Principal extended the loan again, with a new deadline of Dec. 1.
Rents at the complex range from $2,350 a month for a studio to $3,504 for a two-bedroom unit, according to online listings for the property. Those figures are slightly higher than the $2,355 monthly rent average across Koreatown, Zumper data shows.
Though it was built in 2014, Harbor Group said the property needs renovations. The firm plans to spend $22.3 million to renovate common areas, some apartments and other interiors.
A team led by Marc Renard at Cushman & Wakefield brokered the deal between Harbor and Principal.
Multifamily was considered the darling of real estate investment during the pandemic, as rents soared and interest rates hit historic lows. But, as interest rates have risen, multifamily sales — along with other commercial sales — have slowed.
The National Multifamily Housing Council found that apartment building sales came to a “virtual standstill” across the country in October.
Harbor Group has bought more than $1 billion worth of property on the West Coast over the last 12 months. Earlier this year, the firm teamed up with Azure Partners to buy a 480-unit complex in Santa Clarita for $173 million.