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COLUMBUS, OH-Edwards Communities, a local developer, has sold three university apartment complexes in Kentucky, Michigan and Ohio to Austin, TX-based American Campus Communities, for $106.6 million, including the assumption of $70.7 million in debt. The cap rate for the sale is 6.5%, says senior investment advisor Kevin Larimer, with Hendricks & Partners.
The sale included the 858-bed Newton Crossing at 359 Foreman Ave. near the University of Kentucky in Lexington, KY; the 550-bed Olde Towne University Square at 1744 N. Westwood Ave. near the University of Toledo in Toledo, OH; and the 479-bed Peninsular Place at 1000 N. Huron River Dr. in Ypsilanti, MI, near Eastern Michigan University.
Larimer and Paul Dietz, with Hendricks & Partners, negotiated the sale and represented both the buyer and the seller. The properties were sold as part of the developer's business plan, Larimer says. "When they got into the student component, they had always assumed they would build, only hold for a couple of years and sell," he says.
American Campus Communities purchased the properties because of their locations near the universities and because the complexes were recently constructed. "For them it was a unique opportunity to buy almost 1,900 beds in properties that were all extremely close to campus," Larimer says.
The properties are the main apartment complexes for each of the universities, Larimer says. Amenities of the complexes include pools, fitness centers, computer labs, tanning beds and game rooms. Each of the complexes was constructed by the seller in 2005. The complexes are "all close to, or at, 100% occupied and all have pretty significant preleasing for the 2007-2008 school year," Larimer says.
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