Morgan pays $181M for more than 1,000 suburban Chicago apartments

Landlord bought almost 3,000 units in Chicago’s suburbs and Indianapolis

Morgan Properties' Mitchell Morgan with 801 Belinder Lane, 926 Congdon Avenue, and 125 W Dundee Road (Morgan Properties, Apartments.com)
Morgan Properties' Mitchell Morgan with 801 Belinder Lane, 926 Congdon Avenue, and 125 W Dundee Road (Morgan Properties, Apartments.com)

Morgan Properties bought more than 1,000 apartments in suburban Chicago for about $181 million as part of a spending splurge on Midwest multifamily assets.

The three Chicago-area properties it bought almost doubled the Pennsylvania landlord’s Illinois portfolio to 2,035 units, Morgan said in a statement. Investment firm Harbor Group sold the properties, which consisted of the 428-unit Lakes of Schaumburg complex in Schaumburg, the 371-unit Blackhawk Apartments in Elgin and the 204-unit Gates of Deer Grove in Palatine.

The deal provided a 14 percent profit margin to Harbor, without accounting for any money it put into renovations of the assets, which were last sold for $158.4 million between 2012 and 2015, public records show.

It adds to this year’s surge of Chicago-area purchases by multifamily investors, who have been paying high prices for large suburban complexes of 200 units or more. Morgan’s purchase surpasses the record price Albion Residential paid for a suburban Chicago multifamily asset when it shelled out about $140 million for a 612-unit Palatine complex.

While rising interest rates have posed challenges to real estate markets, they haven’t prevented multifamily trades. Morgan, however, noted volatility in financial markets has created opportunities for borrowers to shop for lenders able to keep their rates most appetizing in an environment of tightening monetary policy.

Sign Up for the undefined Newsletter

In Chicago this summer, after rates started rising, a joint venture of American Landmark Properties and Evergreen Residential, and Steven DeFrancis’ Cortland, respectively bought the priciest and second-priciest multifamily deals so far this year at $180 million and $105 million.

“Acquiring these portfolios in an increasingly choppy capital markets environment is a testament to our reputation in providing execution certainty,” Morgan Properties’ Jason Morgan said in a statement.

The Chicago-area acquisitions are part of a $410 million streak of purchases for Morgan, which bought five more apartment properties totaling 1,983 units for a total of $229.3 million in Indianapolis, public records show.

Morgan owns more than 95,000 apartment units across more than 350 housing complexes in the nation, according to a news release.

Read more

220 West Illinois Street, Mapletree's Hiew Yoon Khong and Cortland's Steven DeFrancis (Apartments, Mapletree, Cortland)
Commercial
Chicago
Singapore firm cashes out of Chicago apartments for $105M
Albion's Jason Koehn and Bourbon Square at 500 E Constitution Drive in Palatine (Apartments.com, Albion Residential)
Residential
Chicago
Palatine apartment complex sells for suburban record $140M