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BOWLING GREEN, KY-BlueStone Real Estate Capital, a Philadelphia-based investment back, has provided a $17 million non-recourse, first mortgage loan for the Registry at Western Kentucky University. The property is a 145-unit, 558-bed student housing building across from the college.

Though construction started on the building in 2006, work on final items was just recently completed, says Tim Bradley, senior associate at BlueStone. He tells GlobeSt.com that the developer had some issues with cost overruns, and one of the investors, a private individual based in Orlando, stepped up and took over making sure the building was completed. “They had trouble leasing it up the first school year,” Bradley says. “It wasn’t the final product, and if a student housing place doesn’t have the best reputation, which this at that time did not, you’re going to have trouble leasing it up.”

In 2007, the building was only 60% leased, with work still going on, he says. However, the property is pretty much complete. “They literally just got the electric gates to work for the parking,” Bradley says. “There’s some little things that need to be completed, including the leasing of 17,000 sf of retail at the property. However, this should be leased up well this school year, as it’s right across from the university, and is the only off-campus housing that athletes can rent at and get reimbursed by the college. The university campus student housing is pretty much full.”

The loan-to-value was not allowed to exceed 78%, he says. “We’re estimating a future value of $21 million,” Bradley says. The investor achieved a two-year term on the loan, with three one-year extension options. “He’s a private equity guy, he wants to sell in three to five years,” he says. The property will be managed by Texas-based Asset Campus Housing.

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