Liquidity Abounds for Student Housing Financing
As the industry continues to evolve and mature, so have the capital solutions that exist for the sector, which portends a bullish outlook for this recession-resilient product type for the next several years.
HOUSTON—A $92 million three-year floating-rate loan recently went toward a three-property 1,653-bed student housing portfolio spread across assets in Texas, Iowa and South Carolina. The financing was secured through an institutional lender. Loan proceeds were used to refinance existing construction financing.
Aspen Houston consists of 717 beds within a pair of four-story wrap-style buildings located at 4971 Martin Luther King Blvd. in Houston, which serves the University of Houston. Aspen Ames is a 422-bed garden-style property located at 3306 Lincoln Way in Ames, IA, which serves Iowa State University. Aspen Conway is a 514-bed property totaling 116 cottage-style buildings located at 2251 US-501 East in Conway, SC, which serves Coastal Carolina University.
Holliday Fenoglio Fowler LP worked on behalf of Aspen Heights and Safanad to secure the loan. The HFF debt placement team was led by senior managing director Doug Opalka, senior director Casey Wenzel and director Michael Johnson.
“Aspen Heights and Safanad are one of the premier student housing owner/developers in the United States, and this portfolio presents a significant opportunity for value creation for the partnership,” Opalka said.
Built between 2017 and 2018, the three communities are constructed with bed/bath parity, student amenity offerings and finishes tailored to each market. The student housing lending environment has an abundance of liquidity at the moment, Opalka says.
“This transaction is a great example of the incredible liquidity that exists in the capital markets today for student housing,” Opalka tells GlobeSt.com. “As the industry has continued to evolve and mature, so have the capital solutions that exist for the sector. This liquidity should give us all a very bullish outlook for a recession-resilient product type for several years looking forward.”
About 63% of all student housing consists of private rooms rather than apartments or shared rooms. In 2017 and 2018, about 45,500 student housing beds were delivered in the United States. On average, rent growth of US student housing units is at about 3.3% per year, according to Statista.