Morgan Stanley JV Picks Up $1B Student Housing Portfolio

In one of the largest student housing transactions this year, a partnership between Global Student Accommodation and a fund managed by Morgan Stanley Real Estate Investing acquired a portfolio of eight assets totaling 6,200 beds in Tier 1 U.S. university markets. The deal is valued at more than $1 billion.

The partnership purchased the properties—spread across seven states—in an off-market transaction from a joint venture between a wholly-owned subsidiary of Abu Dhabi Investment Authority and Landmark Properties.

The assets are located in prime university cities home to The University of Virginia, the University of Florida, Texas A&M University and the Pennsylvania State University. The properties are nearly 100 percent occupied.

The acquisition marks the partnership’s entrance into new markets in Virginia, Georgia and Pennsylvania. MSREI and GSA also significantly expanded their presences in markets such as Texas, Florida, Oregon and North Carolina. Their combined portfolio now totals 50 properties across 36 cities in 23 states with nearly 24,000 beds. his portfolio included a mix of cottage-style, high-rise and mid-rise formats.

Landmark and ADIA formed their first joint venture in 2015 to develop student housing properties adjacent to leading U.S. universities. Since then, the development platform has continued to grow and an additional value-add acquisition platform was created in 2022.

Wes Rogers, Chairman and CEO of Landmark Properties, and Mohamed Al Qubaisi, Executive Director of the Real Estate Department at ADIA, said in prepared remarks the sale provides significant liquidity for their platform to recyle into current properties and into their robust pipeline of projects to mee the demands as the student sector continues to grow. 

Al Qubaisi noted ADIA was an early institutional investors in student housing and has built an extensive portfolio in the sector. The platform with Landmark has grown over time as they have focused on acquiring, developing and stabilizing high quality student housing assets and realizing value, he added.

In another large deal late last year, Harrison Street sold a 14-property portfolio with 8,724 beds across 11 states and 13 universities to The Scion Group and another major institutional investor for $893 million. The properties were located in top university markets like the University of Arkansas, Texas A&M University and the University of Missouri.

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Yugo, which is part of The Dot Group alongside GSA, will manage and rebrand the properties. Based in Dubai, The Dot Group invests, develops, owns, manages student living properties around the world. In September, the company acquired Campus Advantage, a U.S. student housing property management business and real estate investment firm. The deal with the Austin, Texas,-based company expanded Yugo’s portfolio to at least 88 properties totaling approximately 40,000 beds across 22 states.

New locations detailed

Officials at MSREI and Dot stated that the acquisition accelerates and strengthens the partnership’s expansion in the U.S. Will Milam, head of U.S. investments at MSREI, said in prepared remarks that the portfolio fully aligns with the firm’s strategy to acquire high-quality, resilient assets in locations with ongoing student housing demand.

The properties are:

• The Retreat at Corvallis (serving Oregon State University)
• The Standard at State College and The Metropolitan State College (serving the Pennsylvania State University)
• The Standard at Charlottesville (serving the University of Virginia)
• The Retreat at Gainesville (serving the University of Florida)
• The Standard at College Station (serving Texas A&M University)
• The Retreat at Kennesaw (serving Kennesaw State University in Georgia)
• The Standard at Raleigh (serving North Carolina State University).

GSA, MSREI join forces

GSA entered the U.S. market in December 2020 with the acquisition of a 27-property portfolio. In December 2021, GSA further strengthened its presence in U.S. university markets by forming a multibillion-dollar joint venture with a fund advised by MSREI for additional investments. The long-term strategic JV enables both GSA and MSREI to substantially grow their presence in the sector and become a market leader in U.S. student housing.

GSA brought $1.6 billion of initial seed assets to the joint venture, with close to 15,000 beds across 21 states and 29 cities. The properties included the first U.S. portfolio GSA acquired in 2020, along with the acquisition of more than 8,100 beds. Nearly two-thirds of the initial portfolio was located at prestigious Power Five schools.

In February 2022, GSA acquired four student housing assets with 1,450 beds from Rael Development Corp. The deal marked GSA’s entry into the University of Arkansas market with the acquisition of an asset in Fayetteville. Later that year, GSA acquired a five-property portfolio with more than 1,600 beds from Harrison Street. The properties comprised three assets in Austin, one in Flagstaff, Ariz. and one in Charleston, S.C., a new market for GSA.

In May of this year, GSA secured a $500 million loan from Wells Fargo Bank to refinance a 23-asset student housing portfolio across 14 states which includes properties serving Arizona State University, Purdue University, Auburn University and the University of Illinois.

A month later, a joint venture between funds managed by MSREI and The Scion Group agreed to acquire a student housing portfolio with more than 2,000 beds in Oxford, Miss., for $262 million. The initial deal was for the purchase of College Town Oxford, a cottage-style asset with 1,018 beds. The partners later closed on five more transactions for a garden-style property and four buildings located downtown.