Morgan Properties' Memphis buy prices the income half of the bid

An affiliate of Morgan Properties paid $56.5 million for Stonebridge Crossing, the 500-unit Cordova complex off Highway 64 near the I-40 interchange, and the number behind that price is the $29.8 million Independence Realty Trust recorded when it bought the same property in 2014, according to the Memphis Business Journal. That works out to $59,600 a door in and $113,000 a door out, a compound gain of roughly 5.5 percent a year over twelve years and $26.7 million of appreciation before any capital the seller put into the 1994-vintage property, which the coverage does not disclose and which is the only figure that would separate a market mark from a capital mark.

A twelve-year hold that clears at 5.5 percent reads like an exit taken when the peak bid did not arrive. The apartment bid, as this publication has argued, has split into an income half and a scarcity half; this print belongs to the income half.

At $113,000 a door, Stonebridge Crossing is a stabilized rent roll: 92 percent occupancy across one-, two-, and three-bedroom units with rents starting at $990 a month, on 32 acres carrying a gym, a pool, tennis courts, and a dog park. Nothing in the trade involves a development site or a bargain entry; the return comes out of the rent roll and the 8 percent of units sitting empty.

Morgan Properties' side of the trade is easier to read. The buyer already holds Crescent at Wolfchase and Waterford Place, two Memphis-area communities, and Stonebridge sits two miles from Wolfchase Galleria—likely the same leasing submarket—so a third property could run off an existing base of staff and vendors. Morgan Properties, founded in 1985 and now counting more than 430 multifamily communities across 22 states, makes a national platform local through the Memphis additions.

The logic matches Bascom's 370-door North Dallas purchase, where a lender-set basis rather than the rent roll set the clearing price. Cordova is the same argument on better paper: the 2014 institutional basis that has roughly doubled is the visible portion of the seller's return, and twelve years of collected rent sit outside the coverage, which keeps the trade from being a clean read on how the asset actually performed for its owner.

What to watch is the rent. At $113,000 a door, the return has to come out of $990 rents and the 8 percent of units now sitting empty; sellers holding similar 2014-vintage suburban paper have their mark at 5.5 percent a year on a twelve-year hold.