Morgan Properties, the nation’s largest private multifamily
owner, has acquired, in partnership with Olayan America, a portfolio of 48
apartment communities and 14,414 units in 11 states for $1.75 billion.
The joint venture purchased the North Star Portfolio from
STAR Real Estate Ventures, a joint venture between El-Ad National Properties and
Yellowstone Portfolio Trust.
The North Star acquisition is the largest multifamily
transaction this year and Morgan Properties’ largest deal since acquiring the
Morgan Communities portfolio of 95 apartment communities and 17,500 units in 8
states for $1.9 billion in 2019.
“The North Star investment is a strategic transaction for
Olayan America, and provides access to some of the best multifamily markets in
the nation. It speaks to the strength of our partnership with Morgan Properties
and our continued confidence in the multifamily sector,” said Erik Horvat,
Managing Director and Head of Real Estate at Olayan America.
“Olayan America prides itself on its ability to move quickly
and capitalize on these unique investment opportunities.”
Since 2014, Morgan
Properties and Olayan America have closed 13 transactions (for $4.3 billion in
total acquisition volume) to acquire a workforce housing portfolio of over 110
properties and 35,000 units in 14 states, all of which are managed and operated
by Morgan Properties. In October of 2020, Morgan Properties and Olayan America
bought the Threshold Portfolio, an 18-property, 3,256-unit multifamily
portfolio in the Carolinas for $323 million.
“The North Star acquisition is a major milestone for our
organization and a testament to our conviction in the fundamentals of class B
multifamily,” said Jonathan Morgan, President of Morgan Properties JV.
“This transaction establishes us as the second largest multifamily owner in the country and the nation’s largest private owner. Morgan Properties’ growth has been unprecedented in the multifamily industry. We have acquired $9 billion of assets and over 70,000 units since 2012. While most of our competitors remain defensive and on the sidelines, Morgan Properties continues to play offense. North Star was right in our wheelhouse given the barriers to entry and we pounced on the opportunity to secure it. We are excited to grow our geographic footprint and enter Florida, Texas, Georgia, Louisiana and Michigan. We value our partnership with Olayan and are thrilled to close another monumental transaction together.”
“The North Star transaction played to our strengths and we
knew we were one of the only groups in the country that could bring it to
fruition,” said Jason Morgan,
Principal at Morgan Properties. “It is a daunting task for most buyers to
acquire geographically diverse portfolios and incorporate the properties into
their operational platform, but this is one of Morgan Properties’ core
competencies. The Morgan Communities transaction set precedent for our North
Star acquisition given its complexities, assumable debt similarities and size.
Due to our long-term hold philosophy, we can pursue transactions encumbered by
long-term debt in which the seller is unwilling or unable to defease.
“As a result, we are able to acquire properties at a discount to the broader market. Morgan Properties has acquired over $5.5 billion of assets across 40,000 units in the last two years alone in mostly off-market transactions. Our team is looking forward to hitting the ground running.”
North Star consists of 48 apartment communities and 14,414
units in 11 states including Florida, Texas, Georgia, North Carolina, South
Carolina, Louisiana, Michigan, Illinois, Indiana, Ohio and Maryland. The
portfolio averages 300 units per property and an average vintage of 1985.
Unit concentrations are in suburban Baltimore (2,566 units),
Tampa-St. Petersburg, FL (1,972 units), suburban Atlanta (1,180 units),
Lafayette, LA (972 units), suburban Chicago (762 units), Dallas (744 units),
and Boca Raton, FL (712 units). Morgan Properties and Olayan America have
solidified their strong market presence in the Mid-Atlantic Region, while
greatly expanding their concentration in the Southeast, Southwest and Midwest.
They plan to invest an additional $100 million for
enhancements and amenity upgrades to the properties of the North Star
With the North Star acquisition, Morgan Properties and
Olayan America entered five new states including Florida, Texas, Georgia,
Louisiana, and Michigan.
As part of the North Star acquisition, Morgan Properties
hired 400 new employees to join its organization, while creating two area vice
president positions, 14 regional management positions and 70 corporate
positions. The Company has decided to open a regional office in Boca Raton to
better serve its expansion in the Southeast Region.
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