Harrison Street, Toll Brothers Sell Arizona Student Housing Asset

University Partners acquired Canvas Tempe, which is near Arizona State University.

Canvas Tempe is located near ASU in Phoenix. Image courtesy of Toll Brothers

Nearly two years after completing Canvas Tempe, an 826-bed student housing community near Arizona State University in Phoenix, Toll Brothers Campus Living and Harrison Street have sold the Tempe, Ariz., asset to University Partners.

Located at 1028 E. Orange St., the 3-acre property is within walking distance of ASU. It is nearly 100 preleased for the 2023-2024 academic year. The purchase price could not immediately be learned.

Dallas-based University Partners, a KKR portfolio company, owns 17 student housing properties in 11 major university markets across the United States, including two other Tempe properties—Apollo Tempe and Vertex. The firm’s other assets are located in Virginia, Georgia, South Carolina, North Carolina, Tennessee, Idaho, Pennsylvania, Minnesota and Texas.

Demand high in student housing sector

Ben Mohns, head of asset management North America at Harrison Street, said in a prepared statement that the student housing sector is benefiting from record-breaking enrollment, occupancy and rent growth. He noted those statistics illustrate the resilience of student housing in an uncertain macroeconomic environment.

The joint venture announced in January 2021 that it was developing Canvas Tempe as a 263-unit and 826-bed luxury student housing community. MidFirst Bank, Fifth Third Bank and Trustmark Bank provided a construction loan for the project. The partnership, formed in December 2020, was the first joint venture between Harrison Street and Toll Brothers.

The apartments feature walk-in closets, smart access, central air conditioning, and washers and dryers. Amenities include a rooftop pool, sauna, business center, lounge, fire pit, grilling stations, study rooms, podcast studio and bike storage.

Among universities, Arizona State University had the largest investment transaction volumes in 2022 with a total of $335.6 million in student housing deals, according to Yardi Matrix data. One of the largest public universities by enrollment in the country, the campus is about 8 miles east of downtown Phoenix. In early 2022, Harrison street formed a partnership with American Campus Communities for the ownership of an eight-property student housing portfolio in Tempe and Glendale, Ariz., serving ASU. Harrison Street paid $551.3 million for a 45 percent stake in the 8,187-bed portfolio, with ACC maintaining the majority stake and management of the properties. ACC had originally developed six of the assets and redeveloped the other two through a public-private partnership with ASU.

In December 2022, Harrison Street and Radnor Property Group, partnered with Duquesne University in Pittsburgh to develop a new 556-student apartment community in Pittsburgh. The 11-story, 216-apartment property will be leasing for the fall of 2024. Two months earlier in October 2022, Harrison Street had teamed up with Trinitas Ventures to develop four new Class A student housing facilities near universities in the Midwest and Southeast U.S.

Harrison Street has sold 197 student housing properties for a gross cost value of $8 billion. Toll Brothers Campus Living, meanwhile, has developed nearly 1,000 units across the U.S., with a development pipeline of more than 1,000. In November, Toll Brothers broke ground on a luxury, low-rise 355-unit student housing property in South Bend, Ind., home to Notre Dame University.

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