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Debt & Equity

Berkadia leads Morgan Properties into the record books with $688M acquisition loan

Berkadia closed $688 million in acquisition financing for Morgan Property’s record purchase of a 10-property multifamily portfolio in Pennsylvania and Virginia.

Morgan Properties, one of the nation’s largest and fastest growing multifamily investors, became Pennsylvania’s largest multifamily owner and operator following its $890.5 million acquisition of the Lantern Portfolio.

The acquisition brings the firm’s total units in Pennsylvania to 9,300 and 50,000 in total.

Berkadia’s Jim Badolato and Michael McKee, of the firm’s Philadelphia office, secured financing with Fannie Mae.

The loan package is comprised of individual 10-year fixed rate first mortgages, featuring seven years of interest only and sub-four percent interest rates.

The loans exceeded 77 percent of the total purchase price. Morgan Properties is budgeting a significant capital plan for these assets to upgrade unit interiors, amenities, and improve the overall experience for tenants.

“The capital commitment Morgan Properties is making to these communities is meaningful to us and is reflected in our terms. We’re proud to be part of the story,” said Badolato.

“We are pleased to partner with Berkadia in financing this portfolio and to turn the deal around so quickly,” said Rob Levin, senior vice president of Multifamily Customer Engagement, Fannie Mae.

“The majority of the units in this portfolio support workforce housing, which is critically needed in communities across the country and is business that Fannie Mae is committed to winning.”

The Philadelphia assets consist of seven properties totaling 2,346 units, which makes the transaction the largest multifamily acquisition in the city’s history. Two communities, Stonegate at Devon and Villas at Bryn Mawr, account for 947 units.

The remaining five properties are located in the suburban submarkets of Conshohocken, West Chester, Downington, Jeffersonville and Bensalem.

The portfolio’s Northern Virginia assets comprise three communities and 1,784 units. The bulk of those residences (1,387) are housed within a single property — Mount Vernon Square in Alexandria — while the other two are located in Fairfax and Sterling, both near Dulles International Airport.

Morgan Properties, which is based in King of Prussia, Pa., will invest a combined $20 million in renovations and upgrades to the 10 Class B properties. Capital improvement plans will focus on both unit interiors and amenity spaces.

Morgan Properties now owns and manages more
than 50,000 units across 11 states.

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