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Morgan Corrals 2,664 Apartments in Northern Virginia

The Willow Run at Mark Center community acquired by Morgan Properties.

Morgan Properties, the 25th largest apartment owner in the United States, has continued its rapid expansion in the metro Washington, D.C., area by acquiring 2,664 apartments as part of its $509 million purchase of the Mark Center portfolio in Alexandria, Va.

In addition to apartments, the Mark Center includes 63,320-square-foot retail center situated on over 150 acres inside the Beltway. Morgan’s strategy is to consolidate the six assets into four large apartment communities to maximize operational efficiencies and execute a $35 million value-add repositioning plan, the company announced Aug. 31.

The transaction is the biggest in Virginia in 2017 and the second largest transaction in the Morgan’s history. In the past five years, Morgan has expanded its portfolio holdings in the Maryland-D.C. corridor from 4,300 apartment homes to 21,500. Morgan owns and manages more than 40,000 apartment units in 10 states.

Jim Costello, Senior Vice President at Real Capital Analytics, estimates that the pricing is down 33 percent from the 2006 prices at which JBG had acquired the Mark Center as part of a portfolio of 10 assets, which were built in the 1950s and 1960s.

“The story to me is more about 2006 than today,” Costello says. “Prices for value-add assets were absurdly high in many cases. Investors were buying these [properties] to renovate, but the intention was not to put them on the leasing market, but instead to fix and flip them to the condo world where pricing was more aggressive.”