Student Housing Portfolio Offered for Nearly $500M

A portfolio of six student housing communities encompassing 4,423 beds across 1,519 units has been put on the market with an estimated total value of nearly $500M.

The assets, which are located in Louisiana, Maine, South Carolina and Texas, are owned by Ceruzzi Properties and Park7, with Ceruzzi holding a majority interest. Both companies are based in New York.

The estimated value of the portfolio works out to $329K per unit, or $113K per bed, according to a Green Street alert. Ceruzzi has tapped Walker & Dunlop to market the portfolio, while Park7 has engaged Newmark in the sales effort.

Investors can bid on individual assets, groups of properties or the entire portfolio, according to the sales pitch, which touts the ability of a buyer to assume existing debt. The properties have fixed-rate Freddie Mac loans with coupons of 3.96% to 4.81% with maturities ranging from 2026 to 2029.

Across the portfolio, the properties have 100% bed-to-bath parity and in-unit washer/dryers. Amenities at the properties include pools, theater rooms and basketball courts.

Two of the properties are in Columbia, SC in proximity to the University of South Carolina. Empire Columbia, a 228-unit (688-bed) six-story building with an average rent of $2,820/unit, or $935/bed is 99% occupied for the 2023-2024 academic year and nearly 90% preleased for the 2024-2025 academic year, with year-over-year rent growth of approximately 16%, the report said.

The 237-unit (640-bed) Park Place Columbia rents for an average of $2,659/unit, or $985/bed. USC has a master lease with the property, a five-story building built in 2016.

The offer includes two assets in Texas: The 239-unit (753-bed) Avenue San Marcos in San Marcos, TX in proximity to Texas State University has studio to five-bedroom apartments which rent for an average of $2,013/unit ($639/bed); the 265-unit (727-bed) Park Place Waco, near Baylor University in Waco, TX, is a five-story building with average rent of $2,399/unit, or $875/bed.

The portfolio includes the 272-unit (870-bed) Avenue Orono in proximity to the University of Maine in Orono, Maine. Its studio to five-bedroom apartments rent for an average of $2,313/unit ($723/bed). Avenue Orono is 100% occupied and 90% preleased for the 2024-2025 academic year, with the property on pace for 10.5% year-over-year rent growth, according to Green Street’s alert.

The 278-unit (745-bed) Park Place Baton Rouge, in proximity to LSU is a six-story building that rents for an average of $2,171/unit ($810/bed). It’s 97% occupied and more than 75% preleased for the 2024-2025 academic year.

The national student housing sector recorded its best pre-leasing season ever as of January, according to a report from RealPage Analytics released last month.

Nearly half of the beds at the core 175 universities RealPage tracks have been leased for the Fall 2024 academic year, with lease rents 6.7% higher than the year before. With 49% of the beds leased, the tally exceeds last year’s pre-lease record of 48.2%, also an all-time record.

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