CHICAGO-A joint venture partnership comprised of GEM Realty Capital Inc. and Schenk Realty Inc. has decided to sell eight student housing communities totaling 2,461 units and 4,057 beds. Located near six large and growing state universities, the portfolio is being marketed by Kevin Larimer, national director of student housing for Hendricks & Partners.
The portfolio has been listed without an asking price, and Larimer declined to discuss the value of the portfolio. However, student housing experts estimate the portfolio is worth roughly $250 million.
“Our preference is to sell the properties as a portfolio, but at the same time, we’re open to offers on individual assets,” Larimer says.
The properties are coming to market because the venture had reached the end of its lifespan and the partners believe it is a good time to come to the market with student housing properties given the investor interest in the sector. “It is a rare occasion that a national portfolio of institutional quality student housing becomes available,” Larimer notes. “The student housing market is very competitive, and it is difficult to assemble eight luxury assets that are all within one mile of university campuses that average over 34,000 students.”
The eight properties included in the offering are: Hillside Ranch and Riverside Ranch at Texas State University; Logan Square at Auburn University; Heritage Apartments at The Ohio State University; Campus Court at Knollwood and Hunter’s Ridge at Western Michigan University; Campus Court at Red Mile at University of Kentucky; and Campus Court at North Walnut at Indiana University.
All eight properties are located off-campus, either adjacent to campus or within in a mile of campus. “This is true core student housing,” Larimer says, noting that the properties are fully amenitized. They target upperclassmen and graduate students with a unit mix of predominantly one- and two-bedroom floorplans.
“Based on pre-leasing activity, this portfolio has a good chance of being 100% leased when school starts for the 2010/2011 school year,” Larimer says.
Most of the properties are available with assumable debt, Larimer says, noting that the debt has favorable interest rates with several years remaining on the loan. “Because of the assumable debt, these assets would be a fit for a very broad investor pool, from large institutions to small buyers,” he says.
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