KING OF PRUSSIA, PA – Morgan Properties, the country's largest private multi-family owner, announced that it has partnered with Olayan America to acquire a portfolio of 48 shared apartments and 14,414 units in 11 states for $ 1.75 billion. The Morgan Properties and Olayan America joint venture acquired the North Star portfolio from STAR Real Estate Ventures, a joint venture between El-Ad National Properties, LLC and Yellowstone Portfolio Trust. The North Star acquisition marks the largest multi-family 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 multi-family markets in the country. This speaks to the strength of our partnership with Morgan Properties and our continued confidence in the multi-family sector, ”said Erik Horvat, General Manager and Head of Real Estate at Olayan America. "Olayan America prides itself on its ability to act quickly and capitalize on these unique investment opportunities." As of 2014, Morgan Properties and Olayan America have completed 13 transactions (for a total acquisition volume of $ 4.3 billion) to acquire a staff 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 2020, Morgan Properties and Olayan America bought the Threshold Portfolio, a multi-family portfolio of 18 properties and 3,256 units in the Carolinas, for $ 323 million.
"The acquisition of North Star marks a major milestone for our company and demonstrates our belief in the fundamentals of Class B apartment buildings," said Jonathan Morgan, President of Morgan Properties JV. “With this transaction, we are the second largest multi-family owner in the country and the largest private owner in the country. Morgan Properties' growth has been unprecedented in the multi-family industry. Since 2012, we have acquired $ 9 billion in assets and over 70,000 units. While most of our competitors remain defensive and marginalized, Morgan Properties continues to be offensive. North Star was right in our wheelhouse given the barriers to entry and we took the opportunity to secure it. We're excited to expand our geographic footprint and move to Florida, Texas, Georgia, Louisiana, and Michigan. We value our partnership with Olayan and look forward to closing another monumental transaction together. "
"The North Star deal capitalized on our strengths and we knew we were one of the few groups in the country that could do it," said Jason Morgan, Principal at Morgan Properties. “It is a daunting task for most buyers to acquire these geographically diverse portfolios and integrate the properties into their operational platform. However, this is one of Morgan Properties' core competencies. The Morgan Communities transaction set a precedent for our North Star acquisition because of its complexity, suspected debt similarities, and size. Because of our long-term hold philosophy, we can track transactions that are burdened by long-term debt where the seller is unwilling or unable to disappoint. As a result, we can buy real estate at a discount to the broader market. Morgan Properties Acquired Over $ 5.5 Billion In the past two years alone, assets of more than 40,000 units have been acquired in largely over-the-counter transactions. Our team looks forward to taking the first steps. "
North Star consists of 48 shared apartments and 14,414 units in 11 states including Florida, Texas, Georgia, North Carolina, South Carolina, Louisiana, Michigan, Illinois, Indiana, Ohio, and Maryland. The portfolio comprises an average of 300 units per property and an average vintage of 1985. The units are concentrated in a suburb of Baltimore (2,566 units), Tampa-St. Petersburg, FL (1,972 units), suburb Atlanta (1,180 units), Lafayette, LA (972 units), suburb Chicago (762 units), Dallas (744 units) and Boca Raton, FL (712 units). Morgan Properties and Olayan America have consolidated their strong market presence in the Mid-Atlantic and significantly expanded their concentration in the Southeast, Southwest and Midwest. They plan to invest an additional $ 100 million in upgrades and improvements to the properties in the North Star portfolio.
With the acquisition of North Star, Morgan Properties and Olayan America have entered five new states, including Florida, Texas, Georgia, Louisiana and Michigan. Morgan Properties has a proven track record in South Florida, where changing demographic trends are driving people and businesses to move. Morgan Properties and Olayan America look forward to expanding their portfolios in each of these markets.
As part of the North Star acquisition, Morgan Properties hired 400 new employees to join its growing organization, creating two divisional 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 support its expansion in the Southeast region.