Ascott Residence Trust to Buy Student Housing Portfolio for $213M

Latitude on Hillsborough. Image courtesy of Ascott Residence Trust

Nearly a year after entering the U.S. student housing market, Singapore-based Ascott Residence Trust will double its assets with the planned $213 million acquisition of four properties with a total of 1,651 beds serving more than 100,000 students across five universities in three states.

The properties are: The Link at University City in Philadelphia, serving more than 45,000 students at the University of Pennsylvania and Drexel University; Latitude on Hillsborough in Raleigh, N.C., serving about 36,000 students at North Carolina State University; Uncommon Wilmington in Wilmington, N.C., serving about 18,000 students at the University of North Carolina Wilmington; and Latitude at Kent in Kent, Ohio, serving about 27,000 students at Kent State University. ART said the properties will be managed by unrelated third-party operators but did not identify the companies.

The acquisition is being done in phases this month and is expected to be completed by the end of this week. ART did not disclose the seller but the properties have all been developed within the past two years by CA Ventures and its student housing operating company, CA Student Living. CA Ventures did not respond to a request for comment. Latitude by Kent with 384 beds and The Link University City with 251 beds were completed by September 2019 and Uncommon Wilmington with 493 beds and Latitude on Hillsborough with 523 beds were delivered by September 2020.

ART, the largest hospitality trust in Asia Pacific, made its first student housing acquisition in the United States in early 2021 with the $95 million purchase of Signature West Midtown, a 525-bed community in Atlanta that was set for completion by the end of March. It is now branded Paloma West Midtown. The REIT added three other U.S. assets between June and November—548-bed Seven07 serving students at the nearby University of Illinois Urbana-Champaign; Wildwood Lubbock, a 1,005-bed property serving students at Texas Tech University; and the planned development of Standard at Columbia, a 678-bed asset that will serve students at the nearby University of South Carolina. Developed in partnership with its sponsor, The Ascott Limited, the $55.2 million project is slated for completion in the second quarter of 2023.

Resilient Markets

With the newest portfolio acquisition, ART will have acquired or developed eight student housing properties with about 4,400 beds in less than a year. ART stated the properties are strategically located in Sunbelt states, Ivy League and ‘Power 5’ athletics conference markets and serve more than 250,000 students from reputable universities with large student populations, steady enrollment growth and strong athletics programs. Because the properties are new with an average of two years, they offer students well-designed apartments and best-in-class facilities and amenities. They are also located within walking distance to the campuses or close to amenities.

Beh Siew Kim, CEO of Ascott Residence Trust Management Ltd. and Ascott Business Trust Management Pte. Ltd., said in a prepared statement ART’s student housing properties in the U.S. have proven to be resilient throughout COVID-19. She said occupancy rates have recovered in the student housing market to pre-COVID levels and rents are increasing. Beh said ART plans to continue investing in the sector because of the overall favorable conditions of the U.S. student housing market.

Property Details

Uncommon Wilmington. Image courtesy of Ascott Residence Trust

ART said the most expensive of the new acquisitions will be The Link University City, located at 3600 Lancaster Ave. in Philadelphia. The REIT will pay $65.5 million for the three-to-five story asset that has 105,129 square feet in residential space and nearly 7,500 square feet in commercial space. It has 84 percent occupancy for the 2021 academic year with 126 units ranging from studios to two-bedroom apartments.

The other properties are:

• Latitude on Hillsborough, situated at 5701 Hillsborough St. in Raleigh, that is being acquired for $64 million. The 212,201-square-foot, three-story property is 97 percent occupied and has 180 units ranging from one- to three-bedroom apartments.
• Uncommon Wilmington, located at 2421 Playa Way in Wilmington, that is being purchased for $54 million. The two- to four-story property has 184,284 square feet of residential space and nearly 5,000 square feet of commercial space. It is 94 percent occupied and has 150 units ranging from one- to two-bedroom apartments.
• Latitude at Kent, situated at 1450 E. Summit St. in Kent, is being purchased for $29.5 million. It is the only one of the four assets that has a leasehold, which will expire on Dec. 31, 2117. The five-story property has 152,307 square feet and is 98 percent occupied. It has 126 units ranging from one- to two-bedroom apartments.