Los Angeles — Highest dollar single-asset sale involved ground lease, two owners and retail with USC as a tenant.
Los Angeles — Blue Vista Capital, on behalf of an institutional client, has purchased University Gateway near the University of Southern California in the highest-dollar single-asset, third party transaction in student housing.
CBRE's National Student Housing Group Director, Ryan Reid, and Associate Director Jaclyn Fitts, based in Dallas, as well as Tyler Anderson and Laurie Lustig-Bower with CBRE in Southern California, represented the sellers in the sale. CBRE's Debt and Equity Executive Vice President Mike Bryant and Vice President Jon Wooton handled the debt placement on behalf of the buyers.
The 421-unit, 1,656-bed student housing and retail property across the street from USC sold for a little more than $200 million, according to Blue Vista Vice President JD Goering.
"We love this asset because it is truly a 'core' asset, across the street from a very prestigious university," Goering says.
The property was developed by Los Angeles-based Urban Partners, which entered into a ground lease with The Shammas Group and USC in June 2005. Urban Partners later formed a joint venture with Blackstone Real Estate Advisors. RCG/Longview and Wells Fargo Bank completed the project financing, and University Gateway opened in 2010.
"With so many moving parts, including retail, a ground lease and a large total transaction size, this deal was very complex," says CBRE's National Student Housing Group Associate Director Jaclyn Fitts.
Fitts says CBRE combined the sales side and the debt side together on this transaction for "one-stop" service for the seller and the buyer by providing both the debt through CBRE's Fannie Mae DUS platform and also selling the deal through an investment sales platform.
"Given the complexities of the transaction, it was extremely beneficial for our Fannie Mae DUS platform to have an understanding of the asset given our involvement in the sale," adds Mike Bryant, executive vice president of CBRE's Debt and Equity Finance Group.
Peak Campus Management, Blue Vista's management unit, will take over the property, which is 96 percentleased for residential and 100 percent leased for retail.
USC accounts for nearly half the retail, which includes studio and performance space for the Thornton School of Music. CVS/pharmacy, Freebirds, Chase Bank, Fresh & Easy and Seattle's Best Coffee are among the other tenants.
Rents start at $999 per bed, netting a minimum of approximately $4,000 monthly for a four-bed unit. The market rent rates add up to $1.7 million per month. Amenities include cultured marble counters, designer flooring and 37-inch flat screen TVs in all 421 units.
"It was a highly negotiated deal," Fitts says. "What makes it unique is the combination of a very large transaction size and the fact that USC is a private school. We typically see the majority of our interest in large, core student housing deals at public schools because they have a larger enrollment base."
— Lynn Peisner