TALLAHASSEE, FL-The Collier Cos. and Madison International have formed a joint venture on a two-property student housing portfolio valued at about $125 million. Freddie Mac provided the $86.7 million in debt for the portfolio, while Madison International Realty acquired an 80% interest in the existing ownership entity.

The senior mortgage loan on Seminole Grand in Tallahassee is a $44.85 million fixed rate loan at 5.17%, with a seven-year term and one year of interest-only amortization. The senior mortgage loan on the Enclave in Gainesville is a $41.86 million fixed rate loan at 5.16 percent, also with a seven-year term and one year of interest-only amortization.

Jones Lang LaSalle’s Capital Markets arranged the joint venture partnership. JLL executive vice president James Tramuto and managing directors Jubeen Vaghefi and Denny St. Romain led the JLL team on the deal.

“Institutional investors have been entering the student housing space for the past few months as it’s a sector where they can achieve slightly higher yields than straight multifamily,” St. Romain tells GlobeSt.com. “It’s also an opportunity for them to do high quality deals in secondary markets which is out of the fray of many larger markets as that’s where many of the bigger universities are located.”

Adjacent to the University of Florida campus and just 10 minutes from Santa Fe College in Gainesville, the Enclave is a class A, 531,360-square-foot property with 412 units. The complex offers 13 buildings with 1,076 beds. It was renovated in 2008 and is 97% occupied. 

Seminole Grand is less than two miles from Florida State University, less than six minutes from Tallahassee Community College and nine minutes from Florida Agricultural and Mechanical University. The 557,640-square-foot property offers 486 apartment homes with 1,554 beds across 36 buildings. It was renovated in 2008 and is 98% occupied.

“In the past few years, investors have been able to get a better understanding of student housing as a sub-asset of multifamily,” St. Romain says. “They’ve seen it hold up during recessionary periods in terms of demand and performance. However, I wouldn’t expect anyone to put 100% of their dollars into this sector--it will always be a sub-allocation of their overall multifamily dollars.”