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PHILADELPHIA-College Park Communities, the student housing division of GMH Communities Trust, has acquired a majority interest in the entities that own University Crossings, a 260-unit, 690-bed facility at 32nd and Market streets, for $59.8 million. The price tag for the stake, which GMH declined to quantify, includes the assumption of approximately $35.6 million of existing mortgage debt.

According to a GMH filing with the SEC describing the terms of its letter of intent for this property, the REIT “would acquire 100% of the partnership interest in the fee owner of the ground, which is comprised of a 99% limited partnership interest and a 1% general partnership interest … (and) also acquire 89% of the partnership in the leasehold owner of the building and other improvements located on the ground.” That partnership is comprised of “an 88% limited partnership interest and a 1% general partnership interest. The remaining 11% limited partnership interest will be retained by the current limited partner.”

The tri-tower building is the former office headquarters of Conrail. A joint venture between locally based Lubert-Adler Real Estate and Philadelphia Management Co. acquired the vacant building in 2001 and converted it into University Crossings. It is within walking distance of Drexel University and University of Pennsylvania and is currently 98% leased.

Under the terms of GMH’s agreement with Drexel, approximately 54 units are reserved for Drexel students. The same university also leases some office and classroom space on the building’s ground floor. College Park Management, the management arm of Newtown Square-based GMH’s student housing division, will manage University Crossings.

Joseph M. Coyle, president of College Park Communities, says in a statement that this property “has tremendous potential to become a flagship property in Philadelphia.” Coyle could not be reached by deadline.

This is GMH’s first acquisition following its recent offering of public stock from which it raised net proceeds of $125 million. It has letters of intent to buy an additional five student housing facilities and two developable land parcels in far-flung locations.

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