Student Housing Business is the voice of the student housing industry.
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CAPITAL MARKETS 39 NOV/DEC 2015 Recent Deals Over the past few months, many players have noticed an increased use of foating-rate fnancing. "The biggest trend I see is the move toward utilizing mostly foating-rate fnancing for value- add transactions and for refnances of new construction," Roelke says. "That trend is driven by both the attractive interest rates you can get (averaging 2.5 percent all-in rates) and the fxed, low-cost prepay- ment penalty. With shorter-term business plans, owners don't want to be constrained with an expen- sive prepayment penalty when they go to sell the asset." CBRE, for example, recently closed a $65.5 million foating- rate loan for an acquisition of a property located near California Polytechnic State University in San Luis Obispo, California, that was especially unique. "It had a very low going-in cap rate, but we were able to push the leverage up to 75 percent LTV by underwriting and support- ing much lower expenses than the property had historically achieved," he says. "We were also able to structure the ability for our client to have the right to do a par- tial master lease on the property that was not already in place." TSB Capital Advisors also is get- ting creative with its deals. Accord- ing to Bradley, TSB's most nota- ble recent deal is The Standard at Gainesville in Gainesville, Florida. The 1,200-bed student housing project features more than 60,000 square feet of retail and a 144-bed hotel on main-and-main adjacent to the University of Florida. "The loan is very complex and structured due to the mixed-use nature of this transaction, and the sheer size of the development," Bradley says. "This construction loan will most likely require two to three banks, and we are self- syndicating the loan up front with our client to secure the most eff- cient deal structure and cost for the project." "We have multiple lenders that have issued term sheets to fnance the project, and now we are fnal- izing the terms to pair a few of the lenders together for this exciting transaction," he adds. Together, we build communites • NEW DEVELOPMENT • MIXED-USE • RE-DEVELOPMENT • MANAGEMENT • AQUISITIONS 855.255.4181 www.universitystudentliving.com On Campus Joint Venture Of Campus A COMPANY OF THE MICHAELS ORGANIZATION