Harrison Buys Brooklyn Student Housing

CHICAGO, IL- GlobeSt.com reported yesterday that a Chicago-based real estate investment firm—Harrison Street Real Estate Capital, had acquired more than 60 Long Island University Brooklyn graduate student apartments for more than $60 million.

City records indicate the transaction totaled $62.7 million, however, Brian Thompson, a senior vice president with Harrison Street, pegged the deal at 490 Fulton St. at $60.9 million, according to the Real Deal.

“It really fits within our focus on education-related properties,” Thompson tells GlobeSt.com. “This part of the property is master-leased by Long Island University and in the past four or five years student housing has proven to be recession proof. Even when unemployment rises, kids are going back to school to fulfill their education.” The firm also buys up healthcare and storage-related real estate, properties also immune to economic downturns.  

The new deal adds 226 beds to their student housing portfolio. Harrison now controls about 28,000 beds in 37 student housing properties across the country; although Thompson says they don't directly operate them. “We grow our business alongside our operating partners.”  

Although the firm has a broad footprint, including student homes in the South, California, the Pacific Northwest and the Northeast, Thompson says “the Midwest as a whole is tough.” The financial struggles of Illinois, for example, “that trickles down through the funding for higher education.”

However, he cautions against making overly-broad judgments about the student housing market. Frequently, many of the smaller, financially struggling Midwestern schools are a short drive away from powerhouses like Indiana University-Bloomington or Purdue University.

“It's not a holistic approach. You have to take a market-by-market and even a school-by-school approach.”