CHICAGO-Harrison Street Real Estate Capital LLC has sold off its majority interest in three student housing properties to its joint venture partner, Campus Crest Communities Inc.
Campus Crest funded the $24 million acquisition through its $326 million IPO. The three communities total 528 units and 1,488 beds, and the REIT now owns interests in 27 student-housing properties with 5,048 apartments and 13,580 beds.
Harrison Street and Campus Crest have been partners since 2008 when the team launched a program to develop 10 “fully]loaded” student living communities across the US. “The IPO serves as an exit strategy for Harrison Street,” says Christopher Merrill, co-founder, president and CEO of Harrison Street. “We sat down with Campus Crest to figure out the best strategy. Given the point we got to with the scale and the interest in student housing, we thought a public exit would be beneficial. This is the first time we’ve taken one of partners public.”
Campus Crest now wholly owns: The Grove at San Marcos, a 192-unit/504-bed community located near Texas State University; The Grove at Milledgeville, a 168-unit/492-bed community near Georgia College & State University; and The Grove at Carrollton, a 168 unit/492-bed community near the University of West Georgia.
The Grove properties feature state-of-the-art amenities including: a resort]style swimming pool; 24]hour gym; fire pit; tanning booths; and a lifestyle]rich community for students centered on its clubhouse. Units are fully furnished and include a washer and dryer, and all bedrooms have a private bathroom and walk]in-closet.
Merrill tells GlobeSt.com the Harrison Street/Campus Crest JV still owns another six student housing properties. Moreover, the partnership will break ground on three to four more student housing projects in 2010.
“The IPO allows Campus Crest to put more equity into deals, and they will have better access to debt capital, but other than that, things won’t change much between us,” Merrill says, adding that Campus Crest will continue to manage the properties held in the JV for a fee.
Earlier this year, Harrison Street launched its third fund, Harrison Street Real Estate Partners III L.P., which targets education, healthcare and storage-related real estate. Last month, it completed the second closing of that fund, raising over $330 million shortly after its first closing in June.
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