Deal Represents Second Purchase in Past 12 Months from Harrison Street Real Estate
Scion Student Communities, a trainee real estate investment group that includes the Canada Pension Plan Financial Investment Board (CPPIB), GIC and The Scion Group LLC, has gotten a U.S. student housing portfolio for $1.1 billion, or about $80,500/ bed.
The investment group is purchasing 22 properties from affiliates of Harrison Street Real Estate Capital. The deal also consists of the recapitalization of 2 student-housing neighborhoods previously owned by Scion-affiliated personal syndications.
Chicago-based Harrison Street Realty had actually assembled its 22 dorms in the portfolio over the past a number of years primarily through one-off transactions throughout five of its different mutual fund.
The entire portfolio includes 24 assets located in 20 different university markets across the country consisting of 13,666 beds. The portfolio consists of a mix of just recently established rental real estate along with some value-added properties, CPPIB said in announcing the deal.
“This is an engaging financial investment opportunity to efficiently develop even more scale in the United States trainee housing sector with a portfolio of premium, well-located homes in new and existing joint venture markets,” said Hilary Spann, handling director, head of Americas, real estate investments, CPPIB.
“Our company believe the nonreligious strength of the United States student housing sector will continue to provide appealing, risk-adjusted returns for the CPP Fund, and we eagerly anticipate continue growing the joint endeavor with GIC and Scion,” included Spann.
Scion president Robert Bronstein called the deal “especially strategic” given the joint endeavor was including six homes in markets in which it currently owns other trainee housing homes.
“This is consistent with our strategy to concentrate our financial investments in target audience by owning numerous properties with diverse item types and rental cost point alternatives,” Bronstein stated.
Since its creation in January 2016, the joint endeavor known as Scion Student Communities has finished over $4 billion of financial investments, mainly through 4 portfolio transactions, deploying $1.4 billion in equity capital. CPPIB and GIC each own a 45% interest in the newly acquired portfolio and Scion owns the staying 10%.
The joint venture’s nationwide portfolio now consists of 73 student housing neighborhoods in 52 top-tier university markets, making up 46,555 beds. The average efficient age of the portfolio is less than 5 years and over 70% of the assets are located within one mile of their respective schools.
This was the second student real estate portfolio in the previous year that Harrison Street has sold to the CPPIB/GIC/Scion joint endeavor. Last March, it sold 9 trainee real estate homes to Scion Trainee Communities for $465 million.
Harrison Street is still one of the largest private financiers in the student real estate market with over 73,000 beds throughout the U.S. and Europe. It also invests in medical office homes, senior housing neighborhoods and self-storage centers.
Christopher Merrill, co-founder, president and CEO of Harrison Street, said the portfolio sale reflects its method of acquiring single trainee housing assets or development opportunities located near large universities, increasing occupancy and packaging them for sale to other investors.
Peter Katz, executive handling director of Marcus & & Millichap’s IPA Student Real estate Department, served as a tactical specialist to Harrison Street on the transaction.
Independently today, Harrison Street obtained a portfolio of 25 medical office complex from Minnsepolis-based Investors Realty Trust (NYSE: IRET) for $367.7 million.
For IRET, the sale was a significant milestone as the final disposition in its goal to refocus as a multifamily business. It prepares to deploy proceeds from the MOB portfolio sale to get multifamily residential or commercial properties in the Twin Cities and Denver.