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SAN ANTONIO-Making its first move into the area, a New York City-based TIC has paid close to $40 million for the 276-unit Reserve in an off-market transaction. The student housing complex is fully occupied, with a significant amount of leases already in hand for the next semester.

Situated on 35 acres at 13903 Babcock Rd., the Reserve was built by Royal Properties of Champagne, IL. According to Jon Smalley, vice president in Capmark Finance Inc.’s Atlanta office, Royal Properties is mainly a merchant builder, having wrapped up work on the Reserve last fall.

“This was the second deal between the buyer and seller and it was done directly without really being marketed,” says Smalley, who arranged $30 million in acquisition financing from Boston-based John Hancock Financial Services Inc. Smalley tells GlobeSt.com that the acquisition financing was pretty straightforward, with the lender putting together a 10-year deal with a 30-year amortization, 75% LTV and sub-6% fixed-rate interest.

Smalley says the challenge of the financing, however, was the fact that it was a TIC buyer. “Conduits have driven that market in the past,” he explains. “But with the demise of the conduit, it created a real challenge for the client to find another lender.”

John Hancock stepped in and was very helpful, Smalley continues. “This is an educated and sophisticated TIC lender. They know the language, know how the operations work and overall was just a great lender,” he says.

The Reserve is an 11-building complex with 828 beds. The mix consists of one-, two- and four-bedroom configurations, ranging from 867 sf to 1,421 sf. The rents are $1.21 per sf to $1.28 per sf or about $498 per bed.

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