Harbor Group International took ownership of a Buckhead apartment building, known since the 1960s for its population clock, after foreclosing on the previous owner’s $104.7 million, floating-rate loan.
The Norfolk, Virginia-based firm bought the 623-unit Lofts at Twenty25, located at 2025 Peachtree Road Northeast, in a foreclosure sale last month for $92.5 million, Bisnow reported, citing real estate tracking firm Databank.
That price comes to $148,500 per unit and is a 32 percent discount from the $136 million Westside Capital Group paid for it in July 2022. The interest rate on the three-year loan had ballooned to 9.1 percent, and Westside tried to hang on, drawing down a $5.2 million interest reserve and making debt payments out of pocket before defaulting on the CMBS loan.
Miami-based Westside bought the property from Varden Capital Properties, which had renovated it extensively and rebranded it from its old name, the Darlington. But Westside struggled with vacancy and rising costs, in an apparent case of a “value-add” gone wrong.
Occupancy dropped from 58 percent in July 2022 to just 26 percent by March 2023, due in part to higher rents and a significant number of evictions, according to Berkadia, the CMBS loan’s master servicer.
The apartments, built in 1951, had relatively low rents before Varden’s renovations. Units that once cost $600 to $1,000 per month were revamped and listed at $1,195 to $1,800. Despite rents below the Buckhead average of $2,200 per month, the property’s smaller units led to higher rent per square foot, outpacing submarket averages, the outlet reported, citing Haddow & Company.
“The floating-rate…is what cratered it,” Ladson Haddow of Haddow & Company told the outlet. “Having walked through it, it seemed like a decent renovation.”
The property is an Atlanta landmark because of a digital display of Atlanta’s population count. The population clock was installed by media mogul Ted Turner in 1965, the Atlanta Journal-Constitution reported.
—Rachel Stone
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