Newtown Square, Pa. — Newtown Square-based GMH Capital Partners has entered into an investment agreement with London-based AGC Equity Partners to acquire existing core and value-add student housing, and develop new purpose-built student housing properties across the U.S.
“We are excited to be partnering with AGC and for the ability to bring international capital to the student housing sector,” says Gary Holloway Jr., president of GMH. “AGC is new to the student housing space and relatively new to domestic investments. They raised funds with their previously established donors, and we will be acting as the operating platform. It is a unique structure and a joint effort.”
The fund has already broken ground on its first property, a 500-bed community located at California Polytechnic State University in San Luis Obispo. The partnership has two additional developments in California in its pipeline, and is seeking to acquire core and value-add assets over the next 18 months. GMH’s student housing division, GMH University Housing, will manage the assets owned with AGC.
“We are targeting 70 percent core assets, and the balance is a mix of value-add and new construction,” says Holloway Jr. “We’re perfectly comfortable with core returns and cash flow. By augmenting the returns with development and value-add deals, we are aiming to become a core fund while giving our investors the ability to earn higher yields from development and value-add.”
In 2015, GMH Capital entered into a joint venture agreement with Principal Real Estate Investors, which included acquiring and developing up to $650 million worth of student housing assets across the U.S. The company’s recent agreement with AGC Equity forms an exclusive investment relationship in the domestic student housing market, effectively marking an end to its work with Principal.
“This picks up where our relationship with Principal left off,” says Holloway Jr. “Now, we have the capital that we desire to acquire more product. This partnership gives us the opportunity not to cool off, and to keep the pedal down and keep pursuing core assets.”
— Katie Sloan