Morgan Properties Expands in Midwest With $410M in Purchases

The Pennsylvania-based firm acquired two portfolios totaling nearly 3,000 units.

The Lakes of Schaumburg in Schaumburg, Ill. Photo courtesy of Morgan Properties

Morgan Properties has acquired two portfolios totaling eight multifamily communities and 2,986 units in Illinois and Indiana for a total of $410 million in separate purchases that expand the Pennsylvania-based company’s reach beyond the Mid-Atlantic region.

The company now owns and operates 2,035 units in Illinois, 3,692 units in Indiana and more than 95,000 across the U.S.

The Illinois portfolio consists of The Lakes at Schaumberg, 428 units,  in Schaumberg Ill., Blackhawk Apartments, 371 units, Elgin, Ill.; and The Gates of Deer Grove, 204 units, in Palatine, Ill. Morgan did not disclose the seller of the assets, but Yardi Matrix reports the most recent owner of the three properties was Harbor Group International. HGI purchased the properties in November 2017 as part of a $1.8 billion, 25-property portfolio with 9,677 units across five major metropolitan areas, including Chicago, from Lone Star Funds.

The Indiana portfolio transaction was reported last month by Cushman & Wakefield, which represented a joint venture of the sellers, Wilkinson Corp. and Torchlight Investors. The properties, all located in Indianapolis, are Boardwalk at Westlake, 1,381 units; Parkside at Castleton Square, 190 units; Lakeside Crossing at Eagle Creek, 166 units; The Elliott at College Park, 126 units; and the Preserve on Allisonville, 120 units. A sixth property, Lakeshore Reserve off 86th, 120 units, was part of the portfolio, but that sale won’t close until later this year due to Housing Assistance Program regulation, according to the Indianapolis Business Journal, and was not included in the Morgan Properties announcement yesterday. The five properties that have been acquired are located along I-465 and accessible to local universities and business hubs in Indianapolis and surrounding areas.

Morgan Properties plans to invest more than $40 million in capital improvements across the two portfolios that will include kitchen and bathroom upgrades, in-unit washer and dryer installations, new vinyl floors, community amenity enhancements and advanced technology.

Jason Morgan, president of Morgan Properties Special Situations and principal, said in a prepared statement that the company was entering the Indianapolis market and expanding its Chicago presence. Growing in the Midwest will provide the national real estate investment and management company the necessary scale to quickly deploy value-add strategies and enhance the overall experience for the residents. Morgan said acquiring the portfolios in an increasingly choppy capital markets environment is a testament to the firm’s reputation in providing execution certainty.

Jonathan Morgan, president of Morgan Properties JV, said in prepared remarks the company remains bullish on multifamily industry fundamentals. He said the King of Prussia, Pa.,-based firm is well positioned to capitalize on portfolio acquisition properties and plans to continue to target opportunistic deals.

Illinois Property Details

The Lakes of Schaumburg, a 28.4-acre property located at 801 Belinder Lane, is the largest of three Chicago market acquisitions. The property, which was 96 percent occupied at closing, was completed in 1987. Prior to HGI acquiring the property in late 2017, Lone Star Funds had purchased the asset in November 2014 for $67.1 million, according to Yardi Matrix data.

The property has two swimming pools, a waterscape, fitness center, business center, clubhouse, playground and controlled access. It has one- and two-bedroom floorplans ranging in size from 560 to 935 square feet, with an average of 682 square feet. Rents ranged from $1,447 to $2,382 with an average of $1,762, according to Yardi Matrix.

The Gates of Deer Grove, a 12.4 acre property at 125 West Dundee Road, was 96.6 percent occupied at closing. It has studios, one-bedroom and two-bedroom layouts. The units range in size from 530 to 1,140 square feet with rents from $1,503 to $2,043 and an average of $838,Yardi Matrix reported. Community amenities include a pool, waterscape, fitness center, business center, tennis court, clubhouse, media room and six laundry facilities.

Blackhawk is located at 926 Congdon Ave. and was completed in 1973. The nearly 15-acre property was 96 percent occupied at the time of the sale. The property has one-, two- and three-bedroom units ranging in size from 598 to 1,015 square feet with rents ranging from $1,393 to $2,020 and an average of $1,541, according to Yardi Matrix. It has a swimming pool, fitness center, business center, clubhouse, tennis and volleyball courts, a playground and 13 laundry facilities.

More Growth

In June, Morgan Properties significantly expanded its multifamily presence in Fayetteville, N.C. with the purchase of two communities totaling 642 units from Morgantown Development. The properties acquired were Westlake at Morganton and The Preserve at Grande Oaks for an undisclosed price. The transaction brought Morgan Properties portfolio in Fayetteville to five properties with 1,530 units.

Last year, Morgan Properties teamed up with Olayan America to acquire a portfolio of 48 apartment communities totaling 14,414 units in 11 states. The North Star portfolio includes assets in Florida, Texas, Georgia, The Carolinas, Louisiana, Michigan, Illinois, Indiana, Ohio and Maryland.

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