CHICAGO—Another year, another large-scale student housing acquisition by a joint venture including the Scion Group LLC, Canada Pension Plan Investment Board and GIC. Two years almost to the day after forming, Scion Student Communities LP said Wednesday it had acquired a 13,666-bed portfolio, consisting primarily of properties owned by five different funds of Harrison Street Real Estate Capital, for approximately $1.1 billion. The JV's latest deal also includes the recapitalization of two communities previously owned by Scion-affiliated private syndications.
It was with the $1.4-bilion acquisition of the University House Communities Group portfolio from InvenTrust Properties Corp. that the JV launched on Jan. 4, 2016. In March of 2017, Harrison Street was among the sellers when Scion Student Communities simultaneously announced three portfolio deals totaling $1.6 billion, including a $550-million recap of 12 legacy Scion Group-owned assets.
Including the newest acquisitions, the JV's portfolio now includes 46,555 beds across 73 student housing communities in 52 leading university markets. CPPIB and GIC each own 45%, with Scion owning the remaining 10% and also managing the properties. The acquisition announced Wednesday expands the JV's presence in six markets where it already has a presence, observes Scion president Robert Bronstein.
Of the latest deal, Hilary Spann, managing director and head of Americas real estate investments at CPPIB, says, “We believe the secular strength of the US student housing sector will continue to deliver attractive risk-adjusted returns for the CPP Fund, and we look forward to continue growing the joint venture with GIC and Scion.” Separately from the JV, CPPIB entered the UK student housing market in March 2015, paying $1.7 billion to acquire the Liberty Living brand from the Brandeaux Student Accommodation Fund.
At Harrison Street, president and CEO Christopher Merrill says the portfolio that is trading to the JV demonstrates “our longstanding strategy of acquiring single assets or development opportunities with substantial value-add potential in or near large, leading universities, making key improvements to increase tenancy, and attracting world-class partners. We continue to identify attractive investment opportunities and remain committed to providing the highest quality student housing facilities to universities across the US.” Peter Katz, executive managing director of Marcus & Millichap's IPA Student Housing Division, provided strategic consulting to Harrison Street on the transaction.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
