Campus Apartments/GIC JV Fills $1B Purse

PHILADELPHIA-Campus Apartments Inc. has formed a venture partnership with GIC Real Estate Pte Ltd., the real estate investment arm of the Government of Singapore Investment Corp., to leverage $1.1 billion in buying power. Together, the companies have assembled a purse of $333 million, according to David Adelman, president and CEO of the locally based, privately held student housing company. Without delineating each partner's share of the investment, he tells GlobeSt.com, "the venture allows us to obtain approximately $700 million in debt in order to invest up to $1.1 billion in real estate.

"We'll use our balance sheet to allow universities to privatize student housing in the same way they are outsourcing food-management and other operations," Adelman says. While the investments will include both the development and acquisition of individual on- and off-campus housing projects, another goal of the venture is the acquisition of other student housing specialty operators.

"This is a very fragmented industry," Adelman says, "and we plan to be an industry consolidator. We're talking with some companies," he says, but declined to identify any. Asked if Newtown Square-based GMH Communities Trust's student housing division was among them, he says, "I can't comment." GMH is in the process of restating its 2005 financials following an internal investigation.

Among the newly formed venture's initial investments is construction of a $30-million, 200,000-sf complex at Franklin & Marshall College in Lancaster, which GlobeSt.com announced on May 9. Adelman says the opening focus is on properties east of the Mississippi. "We would go west if an opportunity of scale arose, but we currently have an intensive property management operation in the East." This is the first time Campus Apartments has brought in an institutional investor. "We explored our options, including going public, and evaluated several institutional investors," before the decision to go solely with GIC RE, Adelman says.

"GIC RE invests globally in diverse sectors and we are looking forward to increasing our exposure to the US student housing sector," says Seek Ngee Huat, president of GIC RE, in a statement. "We were attracted to Campus Apartments' long history of successfully investing, developing and managing high-end campus accommodations." Campus Apartments owns and manages more than 220 properties across the Eastern seaboard and Midwest.

This February GIC RE formed a $700-million joint venture with the San Francisco-based AMB Property to invest in distribution facilities in Mexico. Among GIC RE's wholly owned properties are AT&T Corporate Center in Chicago, the InterContinental Hotel in Paris, Shiodome City Center in Tokyo and Seoul Finance Center in Seoul. Its entire portfolio encompasses all commercial real estate sectors and consists of 140 assets in 30 countries.