Morgan Properties, Olayan America Pick Up $1.75B Apartment Portfolio

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Morgan Properties and Olayan America teamed up to buy a $1.75 billion apartment portfolio spread across 11 states, the companies announced on Wednesday.

The portfolio, dubbed “North Star,” was previously owned by Star Real Estate Ventures — a joint venture between El-Ad National Properties and Yellowstone Portfolio Trust — and includes 48 apartment properties that have 14,414 units, according to a press release.

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North Star has properties in Florida, Texas, North Carolina, South Carolina, Louisiana, Michigan, Illinois, Indiana, Ohio and Maryland, with the largest concentration of apartments in the suburban Baltimore area with 2,566 units, Morgan and Olyana said.

The portfolio has an average of 300 apartments per property, with an average vintage of 1985, and Morgan and Olayan plan to pump $100 million into the buildings for upgrades.

Morgan’s purchase of the North Star portfolio makes it the second-largest multifamily owner in the United States, and it hired an additional 400 workers to help with the portfolio.

“While most of our competitors remain defensive and on the sidelines, Morgan Properties continues to play offense,” Jonathan Morgan, president of Morgan, said in a statement. “North Star was right in our wheelhouse given the barriers to entry and we pounced on the opportunity to secure it.”

Star Real Estate has been trying to offload the North Star portfolio for years, with Morgan almost picking it up in 2014, Bisnow reported. However, the coronavirus pandemic — which has driven city dwellers seeking more spacious digs to move to the suburbs — got Morgan interested in the portfolio again.

Morgan and Olayan assumed $800 million in Fannie Mae and Freddie Mac mortgages as part of the deal, and took another $400 million in new loans from Fannie and Freddie to finance the purchase, according to Bisnow.