NEWTOWN SQUARE, PA-GMH Communities Trust has raised net proceeds of approximately $125 million in a public offering of just over 9.5 million common shares, including the over-allotment. With the proceeds, it will pay down its line of credit, which has a capacity of $150 million, in order to pave the way for additional student housing acquisitions, according to Bradley W. Harris, SVP and CFO of the locally based REIT which specializes in student and military housing.
"The bulk of the line of credit will go to the student housing division," he tells GlobeSt.com. "We have an extensive pipeline with $750 million worth of properties that meet our initial criteria." The company acquired approximately $500 million worth of student housing properties since its initial public offering on Oct. 29, 2004.
According to its latest SEC filing, GMH has a binding agreement to acquire one property and non-binding letters of intent to buy five others along with two undeveloped land parcels. The binding agreement is for University Crossings, a 260-unit, 690-bed facility in Philadelphia that serves Drexel University and University of Pennsylvania. The acquisition is expected to close this month for approximately $59.8 million, including the assumption of about $35.8 million in existing mortgage debt.
The letters of intent are for Aspen Apartments, which serves the University of Georgia; Jacob Heights and Stadium Heights, which serve Minnesota State University in Mankato, MN; Pegasus Connection, a property currently managed by GMH serving University of Central Florida, and Library Gardens, which is under construction to serve University of California at Berkley. The four existing properties have an aggregate of 558 units containing 1,824 beds. Library Gardens will have 176 units containing 544 beds. It is expected to reach completion in August 2006.
The land covered by letters of intent include a 40-acre undeveloped parcel at Outfield Park in Lincoln, NB, which is expected to accommodate 170 units with 560 beds and serve University of Nebraska; and a 12.5-acre undeveloped parcel at Sycamore and 16th Street in Houston that is expected to contain 164 units with 600 beds.
The SEC filing puts the aggregate price tag for which GMH has signed letters of intent at $152.9 million. The company expects to place $84.9 million in new mortgage debt on these assets and assume approximately $10.5 million of their aggregated existing mortgage debt.
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