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JBG Sells Mark Center Portfolio For $509M To Morgan Properties

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Pavilion At Mark Center
Pavilion at Mark Center

In one of the largest real estate deals of 2017, JBG has sold its Mark Center portfolio in Alexandria for $509M. 

Pennsylvania-based Morgan Properties acquired the 2,664-unit portfolio, which sits on a 150-acre site in Alexandria's Beauregard area and has already been rezoned for a 6M SF development. 

The portfolio features six garden-style apartment communities and a 63K SF retail center with a Global Foods, CVS and Starbucks. It sits in the shadow of the Mark Center office complex, which the Institute of Defense Analysis is vacating as it heads to Potomac Yard

The JBG Cos. had originally planned a major development for the property that would have taken place over three decades. But, as it prepared to merge with Vornado's D.C. business to become JBG Smith, the company retained CBRE to sell the property

Morgan Properties Jonathan Morgan
Morgan Properties President Jonathan Morgan speaking at a company event

Morgan Properties plans to launch a $35M repositioning of the existing buildings in the short term, renovating the units and amenities. 

The property was rezoned in 2012 to allow the owner to increase the density from 2.5M SF to 6.4M SF. Morgan Properties may look to build additional density down the road, but President Jonathan Morgan said it is focusing on repositioning the existing buildings for now. 

“It’s not our immediate plan,” Morgan said of the development opportunity. "We think it’s a tremendous opportunity for us, whether it be on the exit or for us to take advantage of ourselves. For the time being, we’re looking at it as a typical acquisition, but optionality is always a great thing to have."

Morgan Properties, which has a strategy of buying large, Class-B apartment portfolios, owns more than 21,000 units in Maryland and D.C. This is the company's first property in Alexandria, but Morgan said it has been targeting the submarket for quite some time. 

“For us to enter a new market like Alexandria, we needed to have scale,” Morgan said. “Buying 2,600 units instantly makes you a major player in the submarket.” 

Bisnow has reached out to JBG Smith and CBRE for comment. This story will be updated with their responses.