Morgan Properties enters Florida with portfolio deal

As part of the largest apartment portfolio purchase in a year in the U.S., Morgan Properties and Olayan America spent $241.62 million to buy four Tampa Bay multifamily complexes, property records indicate.

The $1.75 billion deal gave Morgan, the largest privately held owner of apartments nationwide with 90,000 units, entry into five new states — Florida, Georgia, Texas, Michigan and Louisiana.

Jason Morgan, a company principal, notes that the Tampa area has been the “top relocation destination for Americans who moved during COVID-19."

"Many renters delayed moving during the start of the pandemic, creating a pent-up demand that caused net absorption to surge and rents in these markets to exceed levels before the pandemic," Morgan says, in a late February statement.

In all, Morgan and Olayan bought 48 apartment complexes containing 14,414 units in 11 states.

In the Tampa area, they bought four complexes — Park at Lake Magdalene Apartments & Townhomes in Tampa, Tuscany Pointe at Tampa, Reserve at Lake Pointe in St. Petersburg and Melrose on the Bay, in Clearwater — totaling 1,972 units.

Each of the two-story complexes was built between 1974 and 1986 and remodeled in 2015. Rents in the four complexes range from $895 monthly to $2,531 per month.

Rob Geddes, a Morgan senior vice president of asset management, says the joint venture will invest about $12 million into the four Tampa-area properties to address deferred maintenance on heating, air conditioning and ventilation systems, windows and asphalt; install amenities such as dog parks, playgrounds, Amazon hubs, putting greens and fitness centers; and upgrade units with washer/dryers and new floors.

In all, King of Prussia, Pa.-based Morgan and Olayan, a division of a Saudi Arabian-based investment firm, plan to spend $100 million on improvements.

The pair assumed $800 million in debt on the deal, and secured another $400 million worth of mortgages from Fannie Mae and Freddie Mac.

Since 2012, the 36-year-old Morgan has acquired 70,000 units, spending $9 billion in the process.

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

The Morgan deal marks the second major apartment portfolio sale in the Tampa area in as many months.

In March, Dasmen Residential spent $101.25 million to acquire five complexes in Tampa and Orlando. That 1,011-unit trade was negotiated by commercial real estate brokerage firm Cushman & Wakefield.