JV Plans 262-Bed Property Near UC Berkeley
This is one of several student housing projects to receive financing recently from Kennedy Wilson.
Valiance Capital, The Martin Group and Canyon Real Estate Partners have formed a joint venture to develop The Valiant, a Class A, 83-unit, 262-bed student housing property near the University of California at Berkeley campus. The partnership secured a $38 million senior construction loan from Kennedy Wilson for the project.
Valiance Capital, a Berkeley-based real estate investment firm specializing in value-add and ground-up student housing and multifamily properties, acquired the property in November 2022 with a $10.5 million loan originated by ACRES Capital Corp.
Located at 2538 Durant Ave. in Berkeley, the project site formerly held a three-story, 12-unit building. The joint venture will construct a new eight-story student housing community with 1,461 square feet of retail space. Amenities will include a common study lobby, private study lounges, high-speed Wi-Fi, fitness center, rooftop deck lounge, various gathering spaces and secured bike stations.
Located one block from the main entrance to UC Berkeley’s campus, the property is situated on Durant Avenue between Telegraph Avenue and Bowditch Street. The Valiant is also within walking distance of local bars, restaurants and other neighborhood amenities popular with the UC Berkeley student body. Residents will be within a 15-minute to the Downtown Berkeley BART station, providing connectivity throughout the Bay Area.
Construction is starting immediately and the community is slated for completion prior to the 2026-2027 academic year.
Kennedy Wilson’s student housing lending
Kennedy Wilson, a global real estate investment company and an active student housing lender, said its debt investment platform recently completed three loans, including The Valiant transaction, for student housing projects totaling $184 million. The deals expand the firm’s student housing portfolio to $850 million to develop approximately 8,800 beds, with an additional $1 billion of new student housing loans totaling 8,200 beds currently being evaluated.
The other two student housing loans closed by Kennedy Wilson are for Charme on Eagle, a 463-bed development at the University of North Texas, and a 910-bed project at the University of Wisconsin – Madison. The firm did not break out the loan amounts for the projects.
Thomas Whitesell, head of the debt investment group at Kennedy Wilson, said in a prepared statement they are seeing student housing continue to outperform many other asset classes due to strong operating fundamentals and the scarcity of new development in high-barrier markets adjacent to universities with growing enrollments.
Building for stable demand
Valiance Capital and The Martin Group, an Oakland, Calif.,-based real estate investment firm that develops ground-up, value-add and mixed-use properties focused on infill housing, are the co-GPs on The Valiant and formed the joint venture with lead equity partner Canyon Partners Real Estate for the project.
Nhan Nguyen Le, CEO and principal of Valiance Capital, said the firm continues to be attracted to the student housing sector due to the idiosyncrasies of the Berkeley submarket. He noted many of Valiance’s off-campus housing properties are located closer to the campus than the university’s on-campus housing.
“We believe that as long as we can deliver a better product at a competitive rate, our ‘next level’ housing will always be in demand with the stable and growing student population at UC Berkeley,” he said.
UC Berkeley’s total enrollment for fall 2023 was 45,699 students, according to Yardi Matrix data, up slightly from 45,307 in fall 2022. For the 2022-2023 academic year, there were about 10,478 beds off- and on-campus serving the university.
