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Morgan Properties Rises To Second-Largest Multifamily Landlord In U.S. With $1.75B Portfolio Buy

The Keswick Village apartment complex in Conyers, Georgia, acquired by Morgan Properties and Olayan America in early 2021.

A family company based in the Philadelphia suburbs continues to shoot up the rankings of the country's largest multifamily landlords.

A joint venture of Morgan Properties and Olayan America has closed on the acquisition of a 48-property portfolio containing 14,414 apartments across 11 states, the companies announced in a press release Wednesday. The JV paid $1.75B for the properties to STAR Real Estate Ventures, a joint venture between El-Ad National Properties and Yellowstone Portfolio Group.

With the acquisition, Morgan now owns around 85,000 apartments across the U.S. either outright or as part of a joint venture. That makes it the second-largest multifamily landlord by unit count in the country and the largest privately owned landlord, according to the National Multifamily Housing Council.

“Only a handful of groups have the operating capacity, the capital and the ability to close that deal, so there isn’t much competition to acquire portfolios like that,” Morgan Properties principal Jason Morgan told Bisnow

The acquisition leapfrogs Morgan over Equity Residential, AvalonBay Communities and Starwood Capital Group, which now rank third, fourth and fifth, respectively. MAA, a REIT headquartered in Tennessee, retains the top spot, owning over 100,000 apartments.

Entering 2020, Morgan Properties ranked 20th on the NMHC 50 Largest Apartment Owners List with over 50,000 units; by the end of 2020, it had launched itself to fifth overall with more than 70,000. That includes a 3,200-unit portfolio that the Morgan and Olayan JV closed on in October for $323M. Olayan America is a subsidiary of the Saudi Arabia-based Olayan Group.

Audubon Lake, a multifamily community in Lafayette, Louisiana, acquired by the JV of Morgan Properties and Olayan America.

“As most owners are focused on defense and their own portfolios, we’re in a very good place,” Morgan Properties JV President Jonathan Morgan said. “We’re a bit of a unicorn because we can go out and get these [large] deals, with the leverage and team to go out and execute these transactions.”

STAR had been marketing the portfolio for years, and Morgan Properties turned down a deal in 2014, but pandemic conditions brought it back to the table in November, Morgan said. As part of the deal, the JV assumed $800M of debt in the form of Fannie Mae and Freddie Mac mortgages that mature in the next five to 10 years. To help finance the purchase, the JV took out $400M in new debt from Fannie and Freddie.

Morgan Properties is headquartered in King of Prussia, Pennsylvania, and its portfolio is made up of suburban, Class-B multifamily properties — a popular target for renters fleeing dense urban centers for more space and lower costs of living. The company's portfolio has collected 95% of rents, Morgan said.