Blue Vista Expands US Student Housing Portfolio Through Foreign Partnership

Blue Vista Capital Management has announced it is expanding its US student housing portfolio through a partnership with Koramco Asset Management, a South Korean real estate investment management firm, and a second South Korean institution.

With the partnership, Blue Vista completed the acquisition of Villas on Rio, a 856-bed property at the University of Texas at Austin and the recapitalization of Theory Syracuse, a 601-bed property at Syracuse University for a total of $250 million.

The deal leverages Blue Vista’s investment platform and vertical integration with affiliate PeakMade Real Estate, one of the largest student housing management and development companies in the US. PeakMade manages 80 communities valued at over $2.8 billion across 60 markets.

Since 2003, Blue Vista has acquired and/or developed over $3.0 billion in student housing properties, representing nearly 40,000 beds and approximately 80 properties across the US and Canada.

Founded in 2002, the company has invested over $11.2 billion in total capitalized value through institutional real estate vehicles focusing exclusively on student housing, middle market real estate and lending

In the announcement of the partnership, Blue Vista said student housing presents particularly attractive investment opportunities because of the sector’s resilience to economic cycles, stable enrollment trends for top-tier, traditional four-year universities, continued demand for purpose-built student housing stock and the ability to generate attractive annual cash yields based on stable occupancy trends at well-located, well-managed properties.

Still, the sector has its challenges. The National Multifamily Housing Council recently noted, for example, that the Covid-19 pandemic adversely affected student housing operators.

Namely, NMHC found that last year many properties incurred higher vacancy costs and offered increased concessions in order to attract tenants.

Separately, Moody’s Analytics REIS is expecting student housing asking rents this fall to decline from -2.7% for properties by bed to -1.8% for properties by unit, the first decline since 2014.

Moody’s analyst Ricardo Rosas said increases in Covid-19 numbers is a factor, as some universities are reconsidering their in-person strategy for the coming school year. He said it is creating uncertainty for the student housing sector by putting into question the number of students, their potential tenant base that are going to be in and around campus.