Place Properties Pays $56M for 1,535 Off-Campus Beds

(To read more on the multifamily market, click here.)

ATLANTA-Locally based Place Properties LP has made its first student housing acquisitions in Indiana, Illinois and Texas with the $56-million purchase of 1,535 beds in 458 apartments at three properties. Houston merchant builder Dinnerstein Cos. sold the properties.

Blue Vista Sponsor Equity Fund of Chicago and Fidelity Real Estate Group of Boston are Place Properties’ joint venture partners. The acquisitions bring Place’s portfolio to 7,429 owned-beds and 7,130 beds under management for third parties.

The acquired properties include Sterling University Glen serving Indiana University, built in 2000; Sterling University Plaza serving Illinois State University; and Sterling University Brook serving Sam Houston State University. Construction of Sterling University Brook and Sam Houston State was completed two months ago.

The deal was done at this time because “student housing is a very attractive asset class due to its projected demographic trends and its ability to generate attractive returns,” Peter Stelian, managing principal, Blue Vista Sponsors Equity Fund, says in a prepared statement. Blue Vista Capital Management, also of Chicago, manages the fund which has participated in $231 million worth of student housing properties totaling 6,146 beds since 2003.

Place Properties CEO Cecil Phillips says his company has financed and developed 30 projects comprising 20,000 beds of on-campus and off-campus student housing since its inception in 1998. The newest acquisitions “fit well within our plans for future growth,” Phillips says in the same statement.

Place Properties expects to close in December on a $195-million sale-leaseback transaction with Memphis-based Education Realty Trust Inc., as GlobeSt.com reported Sept. 21. That acquisition will give the Tennessee trust 13 assets in six states totaling 5,894 beds. Place Properties will operate the 96%-occupied housing under long-term leases.