USC-Area Trade Sets New Benchmark
LOS ANGELES—In a complicated deal that brought two CBRE groups together, a Southern California student housing community has changed ownership. Blue Vista Capital LLC, based in Chicago, bought University Gateway on behalf of an institutional client for approximately $200 million. The 421-unit, 1,656-bed property serves students attending the University of Southern California here.
The purchase price is one of the largest paid for a single-asset student housing community so far this year. CBRE’s National Student Housing Group negotiated on behalf of the seller, a partnership of RCG Longview, Blackstone Real Estate Advisors and Urban Partners. The group’s Dallas-based director, Ryan Reid, worked on the deal with associate director Jaclyn Fitts, also in Dallas, as well as Tyler Anderson and Laurie Lustig-Bower both in Southern California.
Meanwhile, a CBRE Debt and Equity group comprised of executive vice president Mike Bryant and vice president Jon Wooton arranged the financing for buyer. Fannie Mae provided the debt, which carried a fixed rate and a 10-year term.
Bryant indicates that the combination of the two teams on the same deal helped make the closing process more efficient. “It was a pleasure to work in tandem with Ryan Reid’s team again to offer the winning solution and one-stop shopping for Blue Vista Capital,” he says. “The seamless sale and financing transaction allows for a smooth closing for all parties as Blue Vista takes this world-class asset to the next stage.”
Indeed, the buyer intends to hold the community on a long-term basis and take advantage of currently low interest rates. Blue Vista managing principal Peter Stelian says the firm is “very excited” to add this property to its portfolio, given its quality and location near a top-tier university.
Originally developed by Urban Partners—which entered into a JV with Blackstone after breaking ground and obtained financing from RCG—University Gateway opened its doors in 2010. Located adjacent to the USC Los Angeles campus at 3335 S. Figueroa St. here, the property also includes over 77,000 square feet of retail space. At the time the deal closed, the residential units were 96% occupied, while the retail component was fully leased, mostly to USC itself. As part of the deal, Peak Campus Management will take over property management.
The deal itself is notable in the overall market, according to Reid. “University Gateway’s transaction will set a new benchmark for a single asset sale in the student housing industry,” said Reid. “Urban Partners developed a high-quality asset in an irreplaceable location that provided a perfect fit to Blue Vista and their investment client.”
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