Investcorp Acquires $300M in Student Housing
The firm purchased four properties across three states.
Investcorp has expanded its student housing holdings with the acquisition of four properties in three states totaling nearly 3,000 beds. The company acquired the communities for more than $300 million.
Located in Texas, Kentucky and Oklahoma, the acquisitions strengthen the global alternative investment firm’s student housing presence and advance the firm’s strategy to build a diversified portfolio of off-campus housing at flagship state universities across the U.S.
The deals closed in four individual transactions. The properties are:
- A 792-bed, 99 percent occupied property at Texas A&M University in College Station, Texas;
- A 486-bed, 98 percent occupied property at Texas State University at San Marcos, Texas;
- A 699-bed, 96 percent occupied property at the University of Kentucky in Lexington, Ky.;
- A 684-bed, 99 percent occupied property at the University of Oklahoma in Norman, Okla.
Demand driven by shortages
Ryan Bassett, Investcorp’s head of U.S. residential acquisitions, said in a prepared statement that the firm has developed robust business plans for each community to improve the properties over time. Noting that Investcorp targets stable assets located at large public universities, Bassett said the firm has long-term conviction in each university’s continued enrollment growth.
His colleague, Michael O’Brien, global co-head of real assets for New York-based Investcorp, said in prepared remarks that the student housing sector has robust fundamentals that will translate into strong performance and compelling risk-adjusted returns for investors. O’Brien noted that many of the top university markets face shortages of housing.
The latest Yardi Matrix national student housing report found that 50 universities of the 200 surveyed hit at least 99 percent occupancy in September, including large schools such as Illinois State, Ole Miss, Oklahoma State, Oklahoma, James Madison, Purdue and Virginia Tech. Surveyed preleasing across Yardi 200 universities reached 94.5 percent at the end of the fall 2024 leasing season, down 10 basis points year-over-year, according to the same report. By September, more than half of Yardi 200 schools were at least 95 percent preleased.
A myriad of experience
Investcorp has owned and managed some 20,000 student housing beds across approximately 30 investments since entering the sector a dozen years ago. In July, Investcorp acquired properties at the University of Texas at Austin and the University of Florida at Gainesville totaling 914 beds for $160 million.
The property at the University of Florida was Class A+ community delivered in October 2023. It is located directly adjacent to the university campus. The University of Texas property was 11 years old at the of the purchase and is close to the campus. Investcorp planned light value-add business plans at both properties.
The firm’s national strategy is focused primarily on the residential and industrial sectors, which total 98 percent of its national real estate portfolio. Since 1996, Investcorp has acquired about 1,400 properties with a total value of more than $26 billion. The firm has approximately $11.2 billion in global real estate assets under management.
