Project name
Student Housing Portfolio (FULLY FUNDED)
Location
– Georgia Southern, Statesboro, Georgia, USA
– Austin Peay, Clarksville, Tennessee, USA
– Stephen P. Austin, Nacogdoches, Texas, USA
– Central Washington, Ellensburg, Washington, USA
Initiator
REALIANCE USA B.V.
Local partner
Category
Four complexes with 860 rental apartments and 2,282 student beds
Expected investment term
5 years
Exit strategy
Sale to one or multiple investors
Total investment
US$ 93,108,257
Bank loan
US$ 72,000,000
Equity project entity
US$ 21,108,257
Structure
Participation in Student Housing Portfolio LLLP
Participation via Student Housing Portfolio LLLP in project company:
– Student Housing Portfolio LLLP US$ 9,600,000
– T2 Investments US$ 9,600,000
– Campus Realty Advisors US$ 2,110,826
Participation
Preferably minimum of US$ 250,000 (Total of 384 participations of US$ 25,000)
Projected gross total return
105.9% in five years
Projected gross return (ROI)
21.2% per year
Distribution (per quarter, from the 2nd year)
Average 11% per year
Unique selling points
The current portfolio is the third investment in which Campus Realty and REALIANCE are entering into a partnership in the interesting and growing niche market for student housing. Campus Realty has many years of experience in acquiring, developing and managing student housing.
The four universities are well-known universities in American growth areas. The average number of students per university is 13,719 and is growing steadily (four to seven percent in 2018). The universities have a wide variety of different educational programs and were founded between 1891 and 1927.
Each complex is within walking or cycling distance of the university and offers easy access to all campus amenities. Average distance to campus is approximately 1.2 miles.
The average occupancy rate in the four markets is 93%. With a current average occupancy rate of 83%, the portfolio has an excellent upside potential.
The high-quality and well-diversified complexes were completed between 2007 and 2012. There is good potential to renovate both the common areas and the interiors.
The complexes have a good ‘unit-mix’ of 2- and 3-room apartments and have spacious individual rooms and sufficient parking.
The portfolio is financed with a 1-month LIBOR loan with a spread of 4.05% for 3 years plus 2 extension options of one year. This provides the opportunity to sell the complexes separately or to refinance the portfolio in the meantime. The interest rate risk will behedged with a cap.
A modest increase in the average occupancy rate as a result of the renovation program provides an expected cash-on-cash return of an average of 11% on an annual basis from the second year.
Campus Realty participates in the project company for US$ 2,110,826 (10%). REALIANCE participates in the Capital LLP for four to eight participations.
For more information you can reach REALIANCE at +31 (0) 20 21 03 180 or invest@realiance.nl
