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June 24, 2020  

Big Student-Housing Portfolio Up for Grabs

A multi-family REIT is shopping its entire student-housing portfolio, consisting of eight properties in high-growth markets in five states.

Preferred Apartment Communities of Atlanta has tapped CBRE to market the 6,095-bed, 2,011-unit portfolio, valued at roughly $480 million. The anticipated price represents $79,000/bed, or $239,000/unit. Investors may bid on individual properties or any combination, but the preference is to strike a deal with a single buyer.

The listing is being pitched as a rare opportunity to achieve scale in the student-housing sector, which has held up better than most other property types amid the pandemic. An off-market deal last year to sell the bundle for $475.4 million failed to close.

The complexes are within a mile of the campuses at Arizona State University, Baylor University in Texas, Florida State University, Kennesaw State University in Georgia, Texas A&M University, Texas Tech University, University of Central Florida and University of North Carolina-Charlotte. All eight universities have announced plans to reopen for the fall semester.

The universities have an average student population of 44,731, with average enrollment growth of 7.5% in the last five years, according to marketing materials. Across the five states, the population of 18-24-year-olds is projected to grow 10% by 2023.

The portfolio has a 96% occupancy rate. Despite the pandemic, rent collections averaged 96% in April and May.

Every floorplan in the portfolio has full bed-to-bath parity — a key feature for tenants. Since 2016, Preferred has spent $9.2 million on renovations.

The properties are:

Knightshade (The Retreat at Orlando), 11037 Retreat Avenue, Orlando. School: University of Central Florida. Built: 2014. Beds: 894. Units: 221. Average size: 1,935 square feet. Average rent/bed: $807.

Rush Student Living (Haven 49), 9200 University City Boulevard, Charlotte. School: UNC-Charlotte. Built: 2018. Beds: 887. Units: 332. Average size: 1,060 sf. Average rent/bed: $784.

URSA, 2255 South University Parks Drive, Waco, Texas. School: Baylor. Built: 2016. Beds: 840. Units: 250. Average size: 1,516 sf. Average rent/bed: $664.

Tradition, 301 Church Avenue, College Station, Texas. School: Texas A&M. Built: 2017. Beds: 808. Units: 427. Average size: 541 sf. Average rent/bed: $656.

Stadium Village, 3044 Hidden Forest Court, Marietta, Ga. School: Kennesaw State. Built: 2015. Beds: 792. Units: 198. Average size: 1,467 sf. Average rent/bed: $734.

North by Northwest, 800 Basin Street, Tallahassee, Fla. School: Florida State. Built: 2012. Beds: 679. Units: 219. Average size: 1,137 sf. Average rent/bed: $700.

SoL, 1949 East University Drive, Tempe, Ariz. School: Arizona State. Built: 2009. Beds: 639. Units: 224. Average size: 1,174 sf. Average rent/bed: $775.

BLOC, 707 Avenue T, Lubbock, Texas. School: Texas Tech. Built: 2017. Beds: 556. Units: 140. Average Size: 1,393 sf. Average rent/bed: $537.

While this is the first time Preferred has widely marketed the portfolio, the REIT last year struck a deal to sell its student-housing holdings to GMH Capital of Newtown Square, Pa., for $475.4 million in an off-market transaction. But GMH terminated the deal in June 2019, forfeiting a $1 million deposit.