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GMH Raises $56M Through JV With Fidelity

NEWTOWN SQUARE, PA-By transferring six properties to a JV with Fidelity Real Estate Group and refinancing, the student housing division repays debt.

By Marita Thomas | Updated on April 19, 2007

NEWTOWN SQUARE, PA-GMH Communities Trust’s plan to place some of its student housing properties into a joint venture in order to raise capital to repay debt has been accomplished. The REIT’s student housing division has completed a joint-venture transaction with Boston-based Fidelity Real Estate Group, a unit of Pyramis Global Advisors, a Fidelity Investments Co.

The JV encompasses six GMH-owned properties. Under the new ownership structure, GMH has transferred its 100% interest in five of the six into the JV, and the sixth will be added once the JV obtains lender approval of the partnership’s assumption of debt on the asset.

Under the transaction, the JV simultaneously placed $88 million in new mortgage debt on the five assets. The new funding has a five-year term and requires interest-only payments at a fixed rate of 5.52%. After repaying existing debt on those properties, GMH obtained a total of $56.1 million in proceeds from a combination of Fidelity’s equity contribution and the new debt. The amount of Fidelity’s equity is undisclosed.

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