RIVERSIDE, CA-Education Realty Trust Inc. has acquired the 90% interest held in 554-bed University Village Towers by its joint-venture partner, based on a total property value of $38.1 million. The student housing complex is adjacent to the University of California, Riverside and is pre-leased for the 2011-2012 academic year at 87%, according to an announcement from Memphis-based Education Realty Trust, a REIT that specializes in student housing.
The REIT notes that the pre-leasing this year is 10 percentage points ahead of the previous year. "Based on this pre-leasing and other information, EDR’s purchase price represents a 6.3% economic cap rate on expected next twelve months net operating income," the company says.
Built in 2005, the complex comprises furnished apartments of one to four bedrooms, along with amenities such as a pool, a fitness center, an outdoor kitchen, tanning beds and Internet access.
Education Realty Trust also cites some statistics that it says bode well for the property. UC Riverside’s total enrollment this academic year is nearly 21,000 students, and the university’s enrollment has grown more than 5% per year for each of the last three years and is expected to continue this approximate pace in the near future, the REIT says. It attributes the enrollment growth in part to the university's tuition costs of approximately $15,500 per year for in-state applicants and $46,000 per year for out-of-state applicants.
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