Allison Higgins, assistant vice president with George Smith Partners in Los Angeles, explains MHE liked that Cambridge at Tyler, situated at 3088 Old Omen Rd., is adjacent to the University of Texas at Tyler. "MHE is actively expanding its student housing portfolio and this one caught their eye because most of the land around this asset is tagged by the university for academic development," she explains.

Higgins and George Smith Partners' principal Steven Bram arranged a $22.3-million acquisition loan through Freddie Mac. MHE ended up with a five-year, permanent, non-recourse loan at Libor plus 2.90%.

The complex, completed in summer 2007, was open in time for the school year and had 100% occupancy throughout the academic year. Cambridge at Tyler has one-, two-, three and four-bedroom units. Monthly rents are $450 to $725 per bed.

Despite the first-year success, Bram tells GlobeSt.com that finding acquisition financing was a challenge. "The fact Tyler was a tertiary market was one issue lenders had," he says, "and the school's enrollment was less than 10,000 students."

Higgins says Freddie Mac, though, was comfortable with the deal. What also was helpful is the university is switching to a four-year program, which is starting to spark demand for housing, she adds.

Higgins says MHE is looking for more student properties--and not just in Texas. "They're actively increasing their student portfolio and are looking nationwide," she says.