GSA, Morgan Stanley Form Student Housing JV
The partnership is seeded with $1.6 billion in assets.
Global Student Accommodation, an international leader in student housing, plans to significantly grow its presence in the United States with the formation of a multi-billion dollar joint venture with a fund advised by Morgan Stanley Real Estate Investing. The JV marks the beginning of a long-term relationship that will pursue strategic growth across the student housing industry as GSA aims to also become a leader in the U.S. market.
The joint venture is seeded with $1.6 billion in assets owned by GSA that have nearly 15,000 beds across 21 states and 29 cities. The properties include an 8,000-bed portfolio acquired in December 2020 from UCAL, a joint venture between University Communities LLC and the California State Teachers Retirement Fund (CalSTRS), that had 27 properties in 18 states including Florida, Pennsylvania, Missouri and Utah. Last month, GSA closed on the acquisition of a U.S. portfolio with more than 8,100 beds across 10 states and 12 cities from longtime partner Harrison Street. Together, nearly two-thirds of the properties in the overall portfolio are at prestigious Power Five schools.
Yugo, GSA’s global brand and operating platform, will direct and manage the properties in the portfolio for the joint venture.
Alec Burger, chair of GSA, said in a prepared statement the joint venture is a significant opportunity for both GSA and MSREI to make a meaningful impact on the U.S. student housing market. Burger said the joint venture will enable GSA to achieve sustainable growth and replicate its success in global student housing markets. Noting the U.S. is the largest student housing market in the world, he said demand for higher education will continue and this opportunity will give GSA and MSREI the ability to increase market share and deliver sustainable returns.
John Klopp, global head of real assets at Morgan Stanley Investment Management, said in prepared remarks the investment management firm had been looking for a scalable opportunity and a best-in-class partner to enter the student housing market. He said the combination of MSREI’s broad real estate investing platform and GSA’s thoughtful and innovative approach to the sector will allow them to deliver attractive and differentiated exposure to the firm’s investors.
TD Securities acted as exclusive financial advisor to GSA. Legal and tax advice was provided by Greenberg Traurig and Goodwin Procter.
In addition to its U.S. investments, GSA operates in 55 cities across nine counties in Europe, the Middle East, Africa and Asia Pacific. The company previously partnered with Harrison Street on a venture to acquire more than 10,000 student housing beds across Spain, targeting investment of more than $845.5 million in the country.
In February 2020, GSA purchased five purpose-built student housing properties in Dublin from Harrison Street in a $440.2 million (EUR 400 million) deal. The properties were the initial investments under the Ireland joint venture of Harrison Street and GSA, in which the pair pledged to invest EUR 250 million to take advantage of the increasing regional appetite for top-quality student housing.