Dive Brief:
- Two longtime Washington D.C.-area real estate powerhouses have joined forces, with 139-year-old The Donohoe Cos. acquiring 93-year-old Borger Management and its more than 9,000 units. The sale was effective on Jan. 1 and announced on Jan 4.
- Borger’s multifamily arm will be renamed Borger Residential and remain at its Washington, D.C. headquarters. Arianna Royster, who has worked at Borger for more than 30 years, will serve as president of Borger Residential, which operates a portfolio of 95 apartment buildings in Washington, Maryland and Virginia.
- Borger Residential will be Bethesda, Maryland-based Donohoe’s sixth line of commercial real estate services. It currently provides five lines of commercial real estate services through Donohoe Development, Donohoe Construction, Donohoe Hospitality, Donohoe Real Estate Services (soon to be renamed Donohoe Commercial Real Estate) and Complete Building Services.
Dive Insight:
In addition to more than 9,000 units of apartments, Borger’s commercial property management portfolio brings 2.5 million square feet of managed office and retail space to Donohoe Commercial Real Estate’s offices in Bethesda, the District, and Tysons Corner.
Joseph Borger will be senior managing director of Donohoe Commercial Real Estate and Claudia Good will be senior vice president and CFO for both Donohoe Commercial Real Estate and Borger Residential. Borger’s Chairman Thomas Borger will join the board of The Donohoe Cos.
“It’s a rarity to find companies with long-standing reputations of such high integrity; it’s even more rare when the two come together,” Thomas Borger said in a press release.
With an active development arm, Donohoe can add more apartment units to the Borger portfolio. “My team is excited to be part of a larger enterprise, including a development company that is actively developing new multifamily properties throughout the region,” Royster said in the press release.
Supply on the way
Donohoe isn’t alone in building in the D.C. area. For the year ending October 2022, the nation’s capital had 19,323 units permitted, ranking only behind New York City; Houston; Austin, Texas; and Dallas, according to RealPage. That was a 5,500-unit increase from October 2020 to October 2021
Over the past decade, the Washington region has seen plenty of new supply. This year, the metro could top 10,000 new units for the eleventh straight year, according to Costar. But the market seems to have absorbed those new apartments — something that executives at Donohoe are probably aware of as they move into residential management.
“Despite having to digest a sizable block of new apartment supply during the past decade, Washington, D.C., has ranked among the country’s most consistent apartment occupancy performers, with a rate hovering between 95% and 96%,” RealPage’s Kim O'Brien wrote in 2021.
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