Harbor Group International closed on a $1.6 billion fund to finance apartment buildings and other multifamily properties as higher interest rates offer attractive returns for lenders willing to put money at risk.

A unit of the Canada Pension Plan Investment Board committed $585 million to the HGI Multifamily Credit Fund, the company said Wednesday. The fund offers fixed and floating-rate senior, mezzanine and preferred-equity loans at rates of about 8% to 12% depending on the type of debt, according to Richard Litton, president of HGI.

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Harbor Group International controls $19 billion1 in real estate investments and is constantly exploring real estate investment opportunities in the worldwide market.