On May 28, affiliates of Harbor Group International, alongside The Garrett Cos. and Telis Group, closed a $351 million senior construction loan facility with ACRE. The proceeds refinance eight multifamily properties totaling 1,573 units across five metropolitan statistical areas.
The eight assets are part of an 11-property portfolio recapitalized by the same joint venture in January 2025. The refinanced properties include five in the Denver and Colorado Springs MSAs, and one each in Phoenix, Indianapolis, and Minneapolis. All were developed between 2024 and 2026.
ACRE, a commercial real estate lender, originated the facility. Terms were not disclosed, but the transaction signals that construction debt markets are selectively reopening for institutional-grade sponsors with diversified geographic exposure.
The refinancing comes as multifamily construction lending remains constrained. Per Trepp data, CMBS conduit loans for multifamily construction fell 42% year-over-year in Q1 2026. Regional bank retrenchment has left a gap that non-bank lenders like ACRE are filling.
Harbor Group International, a Norfolk-based real estate investment firm with over $10 billion in assets under management, has been an active acquirer of multifamily assets. The January 2025 recapitalization of the 11-property portfolio was part of a broader strategy to consolidate control and optimize capital structures.
The Garrett Cos., a multifamily development and construction firm based in Denver, brings local market expertise across the Colorado assets. Telis Group, a real estate investment firm, rounds out the partnership. The three entities have collaborated on multiple transactions in recent years.
Geographic diversification is a key feature of the refinanced portfolio. The Denver and Colorado Springs assets benefit from strong in-migration and job growth in the Front Range. Phoenix continues to attract population inflows, while Indianapolis and Minneapolis offer more stable, less volatile rental markets.
The transaction demonstrates that lenders are willing to provide construction debt refinancing for portfolios with proven lease-up performance and institutional sponsorship. ACRE, which has originated over $5 billion in loans since its founding, is positioning itself as a primary capital provider for this segment.
For the broader market, the deal offers a data point on the cost and availability of construction debt in mid-2026. While the exact spread over SOFR is undisclosed, comparable transactions suggest pricing in the 250–350 basis point range for top-tier sponsors.
The refinancing also highlights the shift from regional bank-led construction lending to non-bank and debt fund sources. As banks continue to manage CRE exposure under regulatory pressure, firms like ACRE are capturing market share.
Harbor Group International, The Garrett Cos., and Telis Group now face the task of executing on the remaining three properties in the 11-asset portfolio. Those assets, not included in this refinancing, may require separate capital solutions or lease-up milestones before lenders will commit.
The transaction closed without a syndication component, per available details. That suggests ACRE held the entire $351 million facility on its balance sheet, a structure that provides certainty of execution but concentrates risk.
For institutional investors tracking the multifamily debt market, this deal confirms that construction refinancing is possible for scale operators with diversified portfolios. The question is whether ACRE and similar lenders can maintain this pace as rate volatility persists.