Morgan Properties Inc., the biggest apartment-complex owner based in Pennsylvania, has bought out American International Group of New York and Berwind Property Group of Newtown Square in a series of recent deals, and is now an exclusive owner of 15,000 apartments in 76 complexes that were formerly owned by partnerships.
Similarly, AIG has taken title to a smaller number of complexes that were formerly co-owned with Morgan.
Owner Mitchell Morgan says the partners "chose to sell their interests to me." In a statement, he said his company raised the money "solely from internal equity sources," without needing loans or new investors. He estimated the value of these apartments Morgan now owns outright at $1.5 billion. The firm is based in King of Prussia.
The deals include 5,000 apartments formerly co-owned with Berwind, which still owns 18,000 apartments across the US, says coo Art Pasquarella; and also some of the 17,000 apartments in 86 complexes, mostly in New Jersey, which Morgan and partner American International Group bought from Kushner Cos. for $1.9 billion at the height of the property-market bubble in 2007.
Morgan and AIG bought those units, mostly in New Jersey, after Kushner founder Charles Kushner went to prison for illegal campaign contributions to ex-New Jersey Gov. Jim McGreevey, among other offenses. Morgan is a leading donor to Republican and Israel causes and has hosted former President Bush at his Main Line home.
A year after the Kushner deal, AIG had problems raising money for the apartments due to its financial collapse, bailout and financial restrictions by the Federal Reserve. On Morgan's behalf, then-U.S. Sen. Arlen Specter (R/D-Pa.) sent a representative to encourage the Fed to let Morgan spend the money, as I reported in 2009 here.