New York City —New York City-based Vesper Holdings has acquired an eight property student housing portfolio totaling 4,925-beds.
The portfolio was acquired for $250 million, sources say. The properties were sold by Heitman and were managed by Campus Advantage.
Acquired properties include Islander Village, a 312-bed community, and Campus Quarters, a 336-bed community, both located near Texas A&M University in Corpus Christi, Texas; The District on Luther, a 1,098-bed community located near the Texas A&M public research university in College Station, Texas; Legacy, a 368-bed community located near Georgia Southern University in Statesboro, Georgia; West 22, an 850-bed community located near Kennesaw State University in Kennesaw, Georgia; Crimson, a 700-bed community located near the University of Alabama in Tuscaloosa, Alabama; University Crossing, a 700-bed community located near Kansas State University in Manhattan, Kansas; and Hawk’s Ridge, a 561-bed community located near the University of Iowa in Iowa City.
"This was a transformative acquisition for us in the size and scale of it,” says Isaac J. Sitt, co-founder and principal of Vesper Holdings. “What we’re the leaders at in the industry today is value-add. Our wheelhouse is first generation, purpose-built student housing. The properties in the portfolio were built — on average — in 2006, so when they were built, they were the best and the brightest. There is not a lot of deferred maintenance, but there is a lot of deferred opportunity.”
Vesper will invest $11 million into capital improvements across the portfolio. Improvements will include unit renovations; extensive enhancements to the properties’ exteriors; updated fitness centers, club houses and pool areas; and substantial technology upgrades throughout the communities.
“The majority of the properties are value-add, and we will be implementing a similar plan to what we did in The Ivy in South Florida,” says Sitt. “There will be some upgrades that the students will get the benefit of for this coming fall. Generally speaking, to really execute, we’re looking at fall of 2018. That's when I really see the big pop for this deal.”
The eight newly-acquired properties will be managed by Campus Life & Style, Vesper’s wholly-owned property management subsidiary. CBRE’s Jaclyn Fitts negotiated the transaction on behalf of the seller.
“This is the ninth largest acquisition in student housing in the United States,” says Sitt. “It’s the fourth largest done by a private owner.”
Several of the properties were financed with debt provided by KeyBank was phenomenal on the debt side, while most of the properties we financed via agency debt from Freddie Mac, according to Sitt. Vesper had worked with the seller for a number of months on the acquisition, and Sitt says Vesper will take down other large transactions in the future.
"This deal was a labor of love, and we’re very excited about it,” continues Sitt. “It’s really the beginning for us; we’re now over 15,000 beds, and we’re looking to continue to grow.”