New York–Madison International Realty, a real estate private equity firm, has acquired an 80 percent equity interest in a portfolio of two class A student-housing communities in Gainesville and Tallahassee, Fla., for $30 million. The two properties–The Enclave and Seminole Grand–total 898 units. Both communities are owned and operated by The Collier Companies, the third-largest student housing operator in the United States.
The Enclave is a garden-style apartment community located adjacent to the University of Florida in Gainesville. Completed in 2008, it has 412 units in 13 buildings and is 98 percent occupied. Seminole Grand is a 486-unit, 36-building garden-style community in close proximity to Florida State University in Tallahassee. It was completed in 1995 and underwent a $7 million renovation in 2008.
Madison Founder and President Ronald Dickerman says that Madison likes the fundamentals of student housing. The properties “fit Madison’s strict parameters for properties in which we acquire partial ownership interests,” Dickerman says. “The transaction allowed the sponsor to monetize some of its embedded equity value.”
Madison International Realty acquires illiquid or partial ownership interests–such as joint venture, limited partner and co-investment interests–in class A properties and portfolios from investors seeking an early exit strategy. The firm also provides equity for recapitalizations, debt restructurings and monetizing embedded equity in existing ownership entities. Madison invests as a principal on behalf of its private equity funds and is active in the United States, the United Kingdom and Western Europe.