Smith Equities Closes $54M in Student Shelter Deals

The deal is the largest to date in Florida student housing this year. Locally based Smith Equities Corp. orchestrated the deal for buyer and seller.

The properties are the 152-unit, 608-bedroom University Club Apartments built in Tallahassee in 2000; the two-year-old, 64-unit, 128-bedroom Grove at University Club apartments, Tallahassee; the four-year-old, 96-unit, 384-bedroom College Club Apartments, Tallahassee; the 40-unit, 160-bedroom, one-year-old Greens at College Club, Tallahassee; and the six-year-old, 94-unit, 376-bedroom University Club Apartments, Gainesville.

University Club Apartments and the Grove at University Club are 100% leased. Average occupancy at the other three properties are 95%. All of the complexes, except the Grove and UCA Gainesville are townhome-styled buildings with four bedrooms and two baths per unit. Average monthly rents are $355 to $385 per bedroom for the four-bedroom apartments and $475 per bedroom for the two-bedroom units.

The transaction was done at this time because "the market was good for a sale [in this category]," Smith Equities broker Debbie Coble tells GlobeSt.com. "Cap rates are down so prices are up, and the owner had owned the properties long enough to take his capital gain and go into other developments."

Coble, vice president Paul M. Guyet and Robert E. Smith, president of Smith Equities, handled the deal for buyer and seller. The transaction indicates the strong demand for student housing in the state, Smith tells Globe St.com.

"The properties never were offered publicly," Smith says. "In consultation with the owner, we decided to go, one at a time, to the major players in the student housing business. We started with ACC and they made a successful offer [immediately]. After that, it was negotiating a contract and closing."

Guyet says "the most difficult aspect of the deal was dealing with the assumption process." The broker says "the lenders almost killed the deal. Instead of approving the assumptions within two months, it took five months to close." Most comparable mortgage loan deals are done under two months, Guyet says.

Smith Equities Corp. has sold $147 million of student housing properties throughout Florida, company president Smith tells GlobeSt.com. "We have sold over $200 million worth of [student and non-student] apartments over the past 12 months and look forward to an even bigger year in 2005," Smith says.