Student Housing Business

JAN-FEB 2018

Student Housing Business is the voice of the student housing industry.

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NE WS IN BRIEF January/February 2018 12 Chicago — Scion Student Commu- nities has purchased a 24-property student housing portfolio contain- ing 13,666 beds across 18 states for $1.1 billion. The portfolio includes properties near 20 leading nation- al universities. Five different Harrison Street Real Estate Capital funds owned the properties in partnership with multiple operators. The transac- tion also includes the recapitaliza- tion of two communities previ- ously owned by Scion-affiliated private syndications. Chicago-based Scion Student Communities is a joint venture be- tween The Scion Group, GIC and the Canada Pension Plan Invest- ment Board (CPPIB). The portfolio contains a mix of recently devel- oped Class A properties in pri- marily Tier 1 university markets, as well as select value-add assets. "This is a compelling invest- ment opportunity to efficiently build further scale in the U.S. stu- dent housing sector with a port- folio of high-quality, well-located properties in new and existing joint venture markets," says Hil- ary Spann, managing director and head of U.S. real estate invest- ments for CPPIB. The properties include Atmo- sphere, a student housing com- munity located two blocks from the University of Arkansas in Fay- etteville; 8N Lofts, located near the University of Nebraska in Lin- coln; Annex, located near Miami University in Oxford, Ohio; Lux on Capitol, located near Indiana University–Purdue University Indianapolis (IUPUI); and Venue at Dinkytown, located near the University of Minnesota in Min- neapolis. "This portfolio is much differ- ent than what we've bought in the past in that it really runs the gamut between brand new, Class A-plus trophy assets to some properties where we intend to do very significant value-add," says Robert Bronstein, Scion's presi- dent. "In fact, we're planning on the most in-depth value-add re- habilitation that we've ever done in the history of our company on some of these properties." The portfolio contains five prop- erties from Trinitas, according to Bronstein, which was the single largest seller aside from Harrison Street. "We have a high regard for Trinitas and what they do," he says. "We like the markets, we like the quality — they're great and have been very accommodating with the transition, which is im- portant to us." Peter Katz, executive managing director of Marcus & Millichap's IPA Student Housing Division, provided strategic consulting to Harrison Street on the transaction. Harrison Street sold an addi- tional nine-property student hous- ing portfolio to Scion in March 2017 for $465 million. These assets were within a larger 11-property portfolio the JV acquired from four different owners. This portfo- lio contained a total of 5,000 beds at eight universities. Scion Student Communities says it plans to pursue additional opportunities to acquire high- quality student housing assets in Tier 1 university markets in the U.S. The company's national portfolio now includes 73 student housing communities in 52 mar- kets totaling 46,555 beds. The av- erage age of the properties is less than five years, and more than 70 percent of the assets are situated within one mile of their respective campuses. "We're looking to continue to grow and to be able to get our hands on and on-board significant portfolios," continues Bronstein. "A large deal like this with a lot of assets and moving pieces, as you can imagine, is a big investment of time and resources — and when you start getting real, a lot of mon- ey — and there is a lot of mutual trust and respect between us and Harrison Street. We started work- ing on this transaction in May, and it took seven months to get done. You can only do that if you respect and trust the people on the other side." The Scion Student Communi- ties joint venture has completed more than $4 billion worth of U.S. investments since its inception in January 2016. This has been achieved primarily through four significant portfolio transactions where about $1.4 billion in equity capital was deployed. CPPIB and GIC each own a 45 percent inter- est in the newly acquired portfo- lio, while Scion Group owns the remaining 10 percent. The Scion Group is the United States' largest privately held own- er/operator of student housing communities. Its current portfolio includes 90 properties and 58,500 beds, plus management of two university-affiliated communities with an additional 2,200 beds. GIC is a global investment firm with more than $100 billion in assets under management. Es- tablished in 1981 to secure the financial future of Singapore, the firm manages Singapore's foreign reserves. CPPIB is a management orga- nization that invests the funds on behalf of the Canada Pension Plan. — Nellie Day and Katie Sloan SCION STUDENT COMMUNITIES BUYS 24-PROPERTY STUDENT HOUSING PORTFOLIO FOR $1.1 BILLION " We're planning on the most in-depth value-add rehabilitation that we've ever done in the history of our company on some of these properties. — Robert Bronstein, President, The Scion Group

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