TALLAHASSE, FL-Centerline Capital Group just closed a duo student housing refis in Tallahassee. The firm provided a $2.4 million Fannie Mae DUS facility to refinance University Gardens II and Cottages at Magnolia.
The assets are non-contiguous multifamily student housing properties located within one quarter mile of each other. Florida State University is 3.2 miles and Florida Agricultural and Mechanical University is 0.9 miles northwest of the facilities, which were recently rehabbed and leased up.
“There is always competition for student properties near large and established universities,” Steven Cox, senior vice president of Commercial Real Estate at Centerline, tells GlobeSt.com. “These properties are often viewed as recession proof because going to college in this day and age is no longer an option, but a necessity. Lenders are definitely getting back in the market, which could spur some new development, as well as increased sales with rehab.”
University Gardens II and Cottages at Magnolia were attractive deals, in part because leases at the properties have 12-month terms and property management rents on a per bed basis. What’s more, the properties are able to retain above average occupancy thanks to features like private exterior access and individual bedrooms. Cox says the borrower had a solid track record in the student housing arena.
Built in 2003, University Gardens II offers one three-story and two two-story buildings located over parking towers, for a total of 16 units and 64 beds. Each unit offers four bedrooms. Cottages at Magnolia has 28 buildings, including one two-story facility over a parking tower and 27 bungalows, for a total of 152 beds.
“Competition is fairly aggressive for student housing with lenders coming back to the market in the form of CMBS—to an extent—as we well life companies, banks and the agencies all active,” Cox says. “The agencies definitely have a leg up with the combination of higher leverage and pricing over CMBS and life companies. Of course, this is all subject to change as the market evolves.”
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