Memphis. Tenn. — Financial agreement is complete and construction has begun in State College.
Memphis. Tenn. — EdR has completed a financial agreement that provides a $3 million mezzanine investment and an option-to-purchase with Landmark Properties for The Retreat at State College, a 587-bed, cottage-style community to be built 1.2 miles from The Pennsylvania State University (Penn State) campus.
“This option agreement is consistent with our strategy to acquire high-quality assets close to top-tier universities with growing enrollments,” said Randy Churchey, president and chief executive officer of EdR. “We are excited to work on our second cottage community with Landmark.”
The Retreat at State College gives Landmark more than 4,000 beds currently under construction and represents Landmark’s second 2013 delivery with EdR. Landmark, in a joint venture with Harrison Street Real Estate Capital, will be providing all the equity for the project.
EdR and Landmark also are developing a $37.6 million cottage community at the University of Mississippi, scheduled to open in fall 2013. The Retreat at Oxford comprises 668 beds.
“We’ve been working on entitling this site for two years now,” said Wes Rogers, president and chief executive officer of Landmark Properties. “It will be impossible to replicate what we’re building here.”
Scheduled for a summer 2013 opening, The Retreat at State College will offer 138 two-, three-, four- and five-bedroom cottages on 24 acres on the bus transit route for the Penn State campus.
EdR has market experience in the Penn State area. Since 2005 EdR has owned and managed The Pointe, a collegiate housing community approximately one mile north of the campus. According to EdR, The Pointe is one of the most consistent performers in the company’s portfolio with respect to occupancy, rate growth and customer satisfaction. It has been 100 percent occupied for the past six years and has achieved an average rate growth of 5.4 percent during the last two years.
“While the university has experienced steady growth in recent years, there have not been many new off-campus collegiate housing developments because of this market’s high barriers to entry,” said Tom Trubiana, executive vice president and chief investment officer for EdR.