Dear Partners,
This is the story of Crosswinds: the deal that looked like a winner on day one, and turned into a street fight by year two.
It was a hell of a fight, but we won.
Bloodied and bruised, sure. But we walked off the field with our heads high, capital protected, and a hard-earned 11%+ investor-level IRR in hand.
We bought it because it had all the makings of a great investment: a strong market, solid bones, and a clear path to upside. It looked like a dream deal. But a year after closing, it went sideways.
Tenants left. Vacancy spiked. Some of the tenants we evicted came back under cover of night to steal from their former neighbors. I’m not exaggerating.
Fights broke out over parking. Tensions escalated. Tenants completed unpermitted work in their suites without permission. That’s when we knew this wasn’t going to be a normal ride.
We lost property managers to burnout. Our team was on-site with the police, more than once, in the middle of the night. This wasn’t asset management. This was trench warfare for IRR.
And here’s the part that matters: the Harbor Capital asset management team never flinched.
They kept going. One lease, one repair, one very tough conversation at a time. And after three years of sheer grind, we exited the asset this past month.
The result? An investor-level IRR just over 11%. 37% below our underwritten target, but hard-earned and real. We protected principal, delivered profit, and got out clean.
This is what we mean when we say it’s safer in the Harbor.
Because when things go sideways, we don’t vanish. We dig in. We fight for your capital. We fight for your return. Not with glossy decks or soft language — with late nights, bolt cutters, and relentless follow-through. Safer in the Harbor isn’t just a line, it’s the way we operate when the storm hits.
The good news: this was an outlier.
Crosswinds represents less than 4% of our total portfolio but often demanded 5x the energy of a typical asset. Most of our properties stabilize efficiently, perform on plan, and don’t involve tenant uprisings or 2:00 AM police visits. But when the rare nightmare hits, this team shows you exactly who we are.
I’m not proud of the deal. I’m proud of the people.
They got bloodied and bruised, and they still brought it home. That’s not luck. That’s Harbor.
To those who invested in Crosswinds, thank you for trusting us.
To those who didn’t, I wanted you to hear the story of one that did not go as planned. It says more about who we are than any pretty pitch deck ever will.
Easy wins are nice. But the hard ones? That’s where character shows up, and that’s where we go to work.
Onward.
Levi
CEO, Harbor Capital