KING OF PRUSSIA, PA - Morgan Properties announced today that it has closed a $1.2 billion series of loans to refinance a large portion of its multifamily portfolio. Berkadia Commercial Mortgage originated the financing of the 73 apartment communities, 71 of which are eligible for securitization through Freddie Mac’s K Deal Program. The underlying properties consist of a wholly owned portfolio of communities that comprise 13,799 units located in New York, New Jersey, Pennsylvania, Delaware and Maryland. Morgan Properties, which is headquartered in King of Prussia, PA own and manage a portfolio of approximately 30,000 units located in ten states throughout the country and is one of the largest private multifamily owners in the Northeast and Mid-Atlantic Region.
“This transaction is the largest refinancing in the history of Morgan Properties dating back to our company’s inception in 1985. It represents slightly more than half of our wholly owned portfolio. We saw this as an unprecedented time to refinance our existing portfolio, by locking in attractive long-term financing at historically low interest rates. Closing the refinancing was a collaborative effort. We are excited to cultivate our longstanding relationship with Freddie Mac and Berkadia,” said Mitchell Morgan, Founder, President and CEO of Morgan Properties.
Freddie Mac provided Morgan Properties with a 10-year fixed-rate financing with a partial interest only period. The facility is comprised of individual property loans that are not cross collateralized. They amortize on 30-year schedules after the interest only period and bear interest at a sub 4% rate.
The underlying properties consist of a mix of garden, mid-rise and high-rise apartment communities ranging in size from 20 to 666 units with an average occupancy of 95%. More than 65% of the loan portfolio is collateralized by properties in New Jersey. Morgan Properties acquired most of these assets as part of its $1.9 billion acquisition of Kushner’s portfolio in 2007 when the company acquired 16,800 units and doubled the size of its portfolio holdings, single-handedly making it the largest landlord in the state of New Jersey. Since acquiring the portfolio, Morgan Properties has completed interior unit renovations, by upgrading more than 3,000 units with newly renovated kitchens, bathrooms and washer and dryers.
“We were ecstatic to continue and expand our longtime relationship with Morgan Properties through this transaction,” said Warren Higgins, Senior Vice President of Berkadia Commercial Mortgage. “Working closely with Freddie Mac, the Berkadia team evaluated all 73 properties across five states and delivered financing with attractive loan terms in a short period of time. We look forward to working with Morgan Properties again in the near future.”
Some of the newer assets include Cranford Crossing, a Westfield, NJ apartment building that was constructed in 2007 and contains 50 apartment units along with a retail component; The Mews at Annandale, a 221-unit apartment community located in Annandale, NJ and built in 2003; and Horizons at Franklin Lakes, a 120-unit apartment community in Franklin Lakes, NJ that was built in 2004 and offers residents top-of-the-line amenities including a movie theater, fitness center, resident lounge and cyber café. The largest property in the Morgan Properties portfolio is the 666-unit Elmwood Village Apartments in Elmwood Park, NJ.
“Morgan Properties is now extremely well positioned for continued growth in the multifamily sector. We have a strong balance sheet and solid foundation to achieve success over the coming years. Since rent growth is only a partial inflationary hedge, we felt compelled to secure attractive fixed-rate, long-term financing to mitigate future interest rate and refinancing risks. Morgan Properties has acquired over 2,800 units over the last eighteen months. We look forward to capitalizing on internal and external growth opportunities going forward,” said Jonathan Morgan, Director of Acquisitions and Capital Markets at Morgan Properties.