HARBOR GROUP INTERNATIONAL ACQUIRES APARTMENT COMMUNITY IN HOUSTON, TEXAS FROM LENDER

(NORFOLK, Virginia) – July 1, 2010, Harbor Group International, LLC (“HGI”) announced today that an affiliate of the Company has acquired the 696-unit Fairfield Creek Apartments located in Houston, Texas from an affiliate of LNR Property Corporation (“LNR”) for $27 million. LNR acquired the property through foreclosure.

“The transaction represents HGI’s diligent focus on foreclosure properties and other distressed assets that offer compelling investment opportunities,” said T. Richard Litton, Jr., President of Harbor Group International. “HGI has extensive operating experience in the Houston multifamily market. We currently own 2,122 units in Houston among four assets,” he said. “The acquisition of Fairfield Creek provides an opportunity to capitalize on our market expertise and add value to the property through a focused management plan,” he further commented.

After acquiring the property through foreclosure, LNR invested capital that includes new roofs, 75% new hardi-plank siding, new appliances in 60% of the units, improved landscaping and an updated fitness facility. HGI plans to invest an additional $1.52 million, or approximately $2,200 per unit, into Fairfield Creek Apartments for additional improvements.

Fairfield Creek was built in 1984 and consists of one, two and three bedroom units averaging 781 square feet per unit. The property is 24.82 acres (28.04 units per acre) and is comprised of 52 buildings, 34 two-story buildings and 18 three-story buildings. The community features four swimming pools with four heated spas, four laundry facilities, picnic areas, a jogging path and limited access gates. The interior features consist of 9 foot ceilings, washer/dryer connections, patios/balconies, brick fireplaces, and built-in bookshelves. The asset is currently approximately 90% occupied.

Harbor Group International, LLC is a private real estate investment and management firm which controls a portfolio of worldwide assets valued in excess of $2.7 billion. HGI is headquartered in Norfolk, Virginia with offices in New York, Chicago, London, Toronto and Tel Aviv. The company’s real estate holdings include over 9.6 million square feet of commercial space and more than 15,000 apartment units. For additional information, please visit www.harborgroupint.com.

###