A Pennsylvania-based firm and its multinational joint venture partner paid $77.25 million in December for the Preserve at Owings Crossing, a nearly 800-unit apartment complex in Reisterstown, expanding their already sizable Maryland holdings.
The two firms, Morgan Properties and The Olayan Group, founded in Saudia Arabia in 1947, intend to perform renovations to reposition the Preserve complex, where the first buildings opened in 1965, they said in a news release. The companies last year also purchased a 2,671-apartment portfolio in the mid-Atlantic from Berkshire Property Advisors for $309 million.
Morgan Properties owns and manages 117 apartment communities in ten states throughout the country. The firm owns more than 11,000 apartments in Maryland including the 692-unit Chartleytowne Apartments, also in Reisterstown.
“Given our local market knowledge and operational expertise, Morgan Properties is the right operator to efficiently manage and enhance the value of the asset,” Morgan Properties CEO Mitchell Morgan said in a statement.
Apartments have drawn interest nationwide, thanks to rising rents and low vacancy rates. The 732-unit Seasons at Bel Air in Harford County, for example, sold for $80 million late last year.
The Preserve at Owings Crossing complex, one of the largest in the Baltimore metro area, benefited from a location in Owings Mills close to the metro, major roads and the new Foundry Row shopping center, said Christine Espenshade of JLL Mid-Atlantic’s Multifamily Group, which represented the Chicago-based seller, Waterton Associates LLC.
“Owings Mills is on the verge of an exciting revitalization, and The Preserve at Owings Crossing is perfectly poised to flourish along with the surrounding community,” she said in a statement.
The garden-style community includes amenities such as a swimming pool, tennis court and playground areas, and went through $5.6 million in renovations in 2006. A fire damaged 11 units at the complex in 2012, displacing residents.
Morgan Properties said it plans to add in-unit washers and dryers and upgrade kitchens and bathrooms, eventually raising rents to rates closer to those charged at other properties in the area.
The average rental rate was about $1,100 at the end of the year in the Baltimore metro area, where vacancy rates averaged about 3.8 percent, according to a recent report by Reis, a real estate information firm that tracks developments with at least 40 units. The average rent in Baltimore-area class A apartments was about $1,600 at the end of the year, according to Delta Associates research.