KING OF PRUSSIA, PA. — Morgan Properties, a Pennsylvania-based investment and management firm, has acquired a portfolio of 10 apartment communities totaling 4,130 units in the metro areas of Philadelphia and Northern Virginia. The sales price was not disclosed, but The Philadelphia Inquirer reports that the portfolio fetched a price of $890.5 million.
The Philadelphia assets consist of seven properties totaling 2,346 units, which makes the transaction the largest multifamily acquisition in the city’s history. Two communities, Stonegate at Devon and Villas at Bryn Mawr, account for 947 units. The remaining five properties are located in the suburban submarkets of Conshohocken, West Chester, Downington, Jeffersonville and Bensalem.
The portfolio’s Northern Virginia assets comprise three communities and 1,784 units. The bulk of those residences (1,387) are housed within a single property — Mount Vernon Square in Alexandria — while the other two are located in Fairfax and Sterling, both near Dulles International Airport.
Morgan Properties, which is based in King of Prussia, Pa., will invest a combined $20 million in renovations and upgrades to the 10 Class B properties. Capital improvement plans will focus on both unit interiors and amenity spaces.
“This acquisition is a game-changer for our organization,” says principal Jason Morgan. “We closed this transaction using our own internal sources of equity, secured fixed-rate financing and will treat this portfolio as a generational hold. We realize these critical-mass portfolios rarely come on the market, as multifamily ownership in suburban Philadelphia is primarily comprised of families.”
“This portfolio represents a once-in-a-lifetime acquisition opportunity that makes us the top multifamily owner in our state,” adds company president Jonathan Morgan. “This transaction solidifies the geographic concentration in two of our core markets, and we remain confident that the strong fundamentals of the multifamily industry have us well positioned for future growth.”
Jim Badolato and Michael McKee of Berkadia’s Philadelphia office arranged Fannie Mae acquisition financing for the deal on behalf of Morgan Properties. The financing, which exceeded 77 percent of the total purchase price, is comprised of individual 10-year first mortgages, featuring seven years of interest-only payments and sub-4 percent fixed interest rates.
Following this deal, Morgan Properties now owns and manages more than 50,000 units across 11 states. The company has purchased more than 30,000 units totaling $5 billion in value since 2012.
— Taylor Williams