The complex, which totals 495 beds and is being renamed The U on Riverbend, last sold in 2006 to a joint-venture group from Connecticut for $14.5 million including a conduit loan for $12 million. A downturn in operations pushed the property into foreclosure, leaving CMBS bondholders with a distressed asset, according to CGI.
New York City-based Centerline Servicing Inc., a special servicer, took control of the property and hired receiver Jones Lang LaSalle, also based in Chicago, to stabilize the asset. JLL listed the property with Chris Epp and Chris Bancroft from Atlanta-based Apartment Realty Advisors' National Student Housing Group.
"The assumable financing made this deal much more attractive to our group," says Alex O'Brien, CGI principal. He adds that the lower purchase price allowed it to leverage the property while maintaining a conservative debt coverage ratio.
Eric Frank, another CGI principal, says private local and regional investors now have a rare opportunity to buy institutional-grade properties at attractive prices. "Most of the large institutional players have either stopped or significantly slowed down their acquisition activity," Frank says.
CGI plans more than $400,000 worth of capital improvements at its UGA acquisition and will manage the property through its in-house firm, Cardinal Group Management & Advisory LLC. The company is seeking other student housing and multifamily opportunities nationwide.
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