Camino Real in Boca Raton, Florida, is part of the 48-community portfolio acquired by Morgan Properties and Olayan America.
Courtesy Morgan Properties Camino Real in Boca Raton, Florida, is part of the 48-community portfolio acquired by Morgan Properties and Olayan America.

Owner and operator Morgan Properties continues to grow its multifamily portfolio and geographic footprint. The firm has partnered with Olayan America to acquire a portfolio of 48 apartment communities with 14,414 units in 11 states for $1.75 billion.

This acquisition is the largest multifamily transaction this year and Morgan Properties’ largest deal since acquiring the Morgan Communities portfolio of 95 apartment communities with 17,500 units in 2019, according to the owner.

The joint venture between Morgan Properties and Olayan America acquired the North Star portfolio from STAR Real Estate Ventures, a joint venture between El-Ad National Properties and Yellowstone Portfolio Trust. Since 2014, Morgan Properties and Olayan America have closed 13 transactions to acquire more than 110 properties and 35,000 units. In October, the two firms acquired an 18-property, 3,256-unit multifamily portfolio in the Carolinas.

“The North Star investment is a strategic transaction for Olayan America and provides access to some of the best multifamily markets in the nation. It speaks to the strength of our partnership with Morgan Properties and our continued confidence in the multifamily sector,” said Erik Horvat, managing director and head of real estate at Olayan America. “Olayan America prides itself on its ability to move quickly and capitalize on these unique investment opportunities.”

The apartment communities in the North Star portfolio are located in Florida, Georgia, Illinois, Indiana, Louisiana, Maryland, Michigan, North Carolina, Ohio, South Carolina, and Texas. The portfolio averages 300 units per property, with an average vintage of 1985. Unit concentrations are in suburban Baltimore (2,566 units); Tampa-St. Petersburg, Florida (1,972 units); suburban Atlanta (1,180 units); Lafayette, Louisiana (972 units); suburban Chicago (762 units); Dallas (744 units); and Boca Raton, Florida (712 units).

“The North Star acquisition is a major milestone for our organization and a testament to our conviction in the fundamentals of Class B multifamily,” said Jonathan Morgan, president of Morgan Properties JV. “This transaction establishes us as the second-largest multifamily owner in the country and the nations’ largest private owner. Morgan Properties’ growth has been unprecedented in the multifamily industry. We have acquired $8 billion of assets and over 70,000 units since 2012. While most of our competitors remain defensive and on the sidelines, Morgan Properties continues to play offense.”

Morgan Properties, ranked No. 5 on the NMHC Top 50 Owners list in 2020, and its affiliates own and manage a portfolio of 357 apartment communities with more than 90,000 in 20 states, primarily in the Mid-Atlantic and Northeast regions.

This acquisition solidifies the joint-venture partners’ strong presence in the Mid-Atlantic region while expanding their concentration in the Southeast, Southwest, and Midwest, with Florida, Georgia, Louisiana, Michigan, and Texas as new states. The partners plan to invest an additional $100 million into the portfolio for enhancements and amenity upgrades.

As part of the acquisition, Morgan Properties hired 400 new employees while creating two area vice president positions, 14 regional management positions, and 70 corporate positions. The owner, based in King of Prussia, Pennsylvania, also has decided to open a regional office in Boca Raton to better serve its expansion in the Southeast.

“The North Star transaction played to our strengths, and we knew we were one of the only groups in the country that could bring it to fruition,” said Jason Morgan, principal at Morgan Properties. “It is a daunting task for most buyers to acquire geographically diverse portfolios and incorporate the properties into their operational platform, but this is one of Morgan Properties’ core competencies. The Morgan Communities transaction set precedent for our North Star acquisition given its complexities, assumable debt similarities, and size. Due to our long-term hold philosophy, we can pursue transactions encumbered by long-term debt in which the seller is unwilling or unable to defease.”