University Falls Into Sweetheart Deal

With student housing demand far outstripping shelter supply, the 30-year-old, 40,000-student University of Central Florida is contracting to buy 3,756 units in two off-campus apartment complexes for $150 million, or about $40,000 per bed. The 80-acre site itself is being transferred free. The deal with College Park Communities of Pennsylvania closes in October.

College Park didn’t do badly on the deal itself. Orange County tax records show the developer bought the assets in 1998 and 1999 for $29,702 per bed. “A nice profit,” Smith Equities Corp. president Robert E. Smith tells GlobeSt.com.

The university is funding the transaction through the UCF Foundation and another non-profit corporation now being established. The non-profit entity will sell bonds that will be retired over 30 years with student rent revenue.

College Park will continue to manage the three-year-old properties under a separate contract with UCF. The assets are Knight’s Krossing, 2,532 residents; and Knight’s Court, 1,224 students. Both apartment structures are on Alafaya Trail, directly across from the campus.

The campus currently houses 2,700 students in dormitories, campus-based apartments, fraternity and sorority residences. A new dormitory complex, under construction on the south side of the campus, will provide 800 additional beds next fall and another 800 in 2002.

College Park Communities owns/operates apartment complexes near 27 universities nationwide.