Morgan Properties Expands into Multifamily Credit Space with Acquisition of K-Series Securitization

KING OF PRUSSIA, PA – Morgan Properties, a real estate investment and management company, announced today it has acquired a “B-Piece” from Freddie Mac through its K-Series Program. The issuance, K-75, is supported by a pool of 73 multifamily mortgage loans. This is the second recent K-Series Deal involving Morgan Properties, following its K-MP1 acquisition in September 2017.

At closing, the total loan balance represented by the K-75 Multifamily Mortgage Pass-Through Certificates was approximately $1.3 billion and the B-Piece that Morgan Properties acquired had a face amount of approximately $97 million. K-75 is represented by a well-diversified group of multifamily properties located across 23 states including: Texas, California, Florida, Pennsylvania, Virginia, Oregon, and Tennessee (in order of geographic concentration), among other states. The loan metrics underlying the Pass-Through Certificates included: LTV of 67.7 percent at closing, which is anticipated to amortize down to 62.1 percent by maturity; and a weighted average net cash flow debt service coverage ratio of 1.52x.

“We are incredibly excited to announce our acquisition of K-75. This investment allows us to diversify in the capital stack and leverage off our vertically integrated multifamily investment platform,” said Jason Morgan, Senior Vice President of Acquisitions and Investment Management at Morgan Properties. “Following a record-breaking 2017, which included $1.2 billion in acquisition volume and our first purchase of a K-Series Deal, it’s a natural step to further expand into the multifamily credit space. We plan on growing our debt platform through the K-Series Program and building upon our existing relationship with Freddie Mac.”

Freddie Mac Multifamily is a leading issuer of agency-guaranteed structured multifamily securities. K-Series Deals are part of the company’s business strategy to transfer a portion of the risk of losses away from taxpayers and to private investors who purchase the unguaranteed subordinate bonds, such as the “B-Piece.” K Certificates typically feature a wide range of investor options with stable cash flows and structured credit enhancement.

About Morgan Properties: Established in 1985 by Mitchell Morgan, Morgan Properties is a national real estate investment and management company headquartered in King of Prussia, Pennsylvania. Morgan Properties and its affiliate, Morgan Properties JV own and manage a multifamily portfolio comprised of 150 apartment communities and over 45,000 units located in ten states, primarily in the Mid-Atlantic and Northeast Region. Morgan Properties is currently the 20th largest apartment owner in the country. The Company prides itself on its quick decision-making ability, strong capital relationships and operational expertise.

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