Amenities at the eight-acre Verge complex include a resort-style pool with in-water seating and wireless Internet access; a clubhouse with game room and lounge and a lighted sand volleyball court. The unit mix ranges from one-bed, one bath units to four-bed, four-bath units. Students sign individual leases regardless of the unit size.
"Student housing continues to be an outstanding portfolio diversifier because its value isn't correlated to the rest of the real estate industry (and) the student housing market in the Sacramento area has historically been underserved," says Henderson Global portfolio manager AJ Richard.
Valeo will serve both as the general partner and operating partner for the new property. Henderson Global Investors will oversee the asset management of the property.
The acquisition was the initial investment by a joint venture between Chicago-based Henderson and Valeo, a Lake Forest, CA-based company that specializes in the development and management of faculty and student housing throughout the Western US. The venture has approximately $88 million in committed equity remaining and available for additional investment.
Henderson and Valeo acquired the property from GMH Communities Trust, which earlier this year was acquired by Austin, TX-based American Campus Communities for $1.4 billion. The cash-and-stock deal consisted of several moving parts including ACC's assumption of the portfolio's outstanding debt, which totaled approximately $963 million and a separate transaction in which GMH's military housing portfolio was sold to a US subsidiary of Balfour Beatty Plc for $350 million.
American Campus Communities also joint ventured with an institutional fund via Fidelity Real Estate Group. Fifteen GMH student-housing properties worth $326 million were transferred to that venture, in which American Campus is providing property management services and retaining a minority interest. KeyBank National Association provided a $200-million term loan to fund part of that particular piece of this complex deal.
Before its sale, GMH Communities' owned, or had ownership interests in, 72 student housing properties containing a total of 13,232 units and 42,670 beds, and seven undeveloped or partially developed parcels of land held for development as student housing properties. The company also managed a total of 19 student housing properties (3,534 units/11,683 beds) owned by others.
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