Morgan Properties Reaches for a $316M ‘Star’

Berkadia negotiated the sale of the portfolio, which comprises more than 2,800 units in four states.
Westerlee Apartments in Catonsville, Md., was one of the properties sold in the Star Portfolio deal.

Westerlee Apartments in Catonsville, Md., acquired by Morgan Properties as part of the Star Portfolio.

An affiliate of Morgan Properties has shelled out $316 million for a four-state portfolio consisting of more than 2,800 units. Berkadia negotiated the sale on behalf of Morgan Properties JV. Collectively known as the Star Portfolio, the 11 properties include communities in Maryland, Pennsylvania, North Carolina and South Carolina.

Berkadia senior managing directors Scott Melnick and David Oakley led the team representing Morgan Properties. Deutsche Bank represented the undisclosed seller.

“We’ve worked very closely with the buyer on a number of transactions and were aware that they were looking for a large portfolio and also interested in expanding out of mid-Atlantic region,” Melnick told MHN. “For these properties in particular, the buyer was attracted to the upside through value-add and repositioning.”

Morgan Properties will complete an extensive, multimillion-dollar repositioning plan to enhance the value of the properties. Renovations will include kitchen and bath upgrades, as well as amenity upgrades such as fitness centers, resident lounges, dog parks, playgrounds, grilling areas and exterior fitness stations. The assets’ average age is about 30 years.

The portfolio also comprises properties in “very desirable, high-barrier submarkets in close proximity to major development hubs and public transit,” according to a statement from Berkadia.

Greens at Westgate

The Greens at Westgate in Pennsylvania, now owned by Morgan Properties.

The 11 properties include six suburban Maryland communities: Silver Spring Station, Westerlee, The Willows, St. Mary’s, Taylor Park and Willowood; one in Pennsylvania, The Greens at Westgate; two in South Carolina, The Waterway and Forest Oaks; and two in Raleigh, N.C., Falls Creek and Heather Park.

“The Star Portfolio was a big acquisition for our organization,” said Mitchell Morgan, founder & CEO of Morgan Properties. “Our team was eager to expand our portfolio holdings in Maryland, Pennsylvania and the Carolinas. We are also very excited about the prospect of entering North Carolina, which we feel is a market with a lot of potential.”

This acquisition marks Morgan Properties’ rapid expansion in the Mid-Atlantic region. So far in 2016, the firm has closed four transactions to acquire more than $500 million of multifamily assets with three joint venture partners. In addition to the Star Portfolio, Morgan Properties recently completed three other acquisitions: Grand Pointe, a 325-unit community in Columbia, Md.; Avery Park, a 606-unit community in Silver Spring, Md.; and Henson Creek, a 450-unit community in Temple Hills, Md. In Maryland alone, Morgan Properties manages 42 assets and more than 16,000 units, making the firm one of the largest apartment owners in the state.