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Mar. 8, 2013

Joint Venture Buys N.J. Student Housing Community for $44M

By Dees Stribling, Contributing Editor

New Brunswick, N.J.—A joint venture has obtained a $44.1 million loan to acquire a 674-bed student-housing community, Rockoff Hall, in New Brunswick, N.J. The property has 186 units in two- and three-bedroom floor plans, as well as street-level retail space.

The 12-story structure serves Rutgers, the State University of New Jersey, and is within walking distance of College Avenue and the Cook Douglas campuses. The building is named in honor of Alvin J. Rockoff, a 1949 graduate of Rutgers College and longtime advocate for the revitalization of New Brunswick.

New Brunswick Development, a nonprofit developer heavily involved in revitalizing the city’s downtown, built the structure in 2005 and is selling it to McKinney Properties and Virtus Real Estate Capital. Investors Bank’s Commercial Real Estate Finance Group provided the commercial mortgage financing for the deal.

Headquartered in Pittsburgh, McKinney owns and operates more than 10,000 multifamily and student housing units and more than 1 million square feet of commercial and retail space. Virtus is an Austin-based specialist in equity sponsorship of product in niche CRE markets.

The transaction comes at a time of frenetic activity in the student-housing sector. According to a recent report by ARA National Student Housing Group, 2012 was a record year for investment sales of student housing, with $3.7 billion worth of properties trading hands (counting only deals that are $5 million or more). That’s a near doubling—up 95 percent—of dollar volume compared to 2011.

Most of the buyers are REITs and institutional investors, reports ARA, with developers and REITs making up the majority of the sellers. A total of 126 properties traded for more than $5 million last year, compared with 74 in 2011.

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