A partnership between Pebb Capital and TriArch Real Estate Group has sold The Alabama, a 175-bed, trophy student housing property located in Greenwich Village in lower Manhattan. The asset sold for approximately $104 million after a successful rehabilitation of the historic asset that’s more than 100 years old.
Alabama Flats LLC acquired the building located at 15 E. 11th St. that provides housing to students at New York University, The New School and the Benjamin N. Cardozo School of Law.
Pebb and TriArch acquired the building between Fifth Avenue and University Place in October 2016 for $58 million and completely renovated the asset, adding more than 50 bed-spaces to the property in time for the 2017-2018 academic year.
The units offer modern, fully-equipped kitchens with high-speed Internet and cable included. Community amenities include an attended lobby and on-site management, fitness center, 24-hour business center with study and conference rooms, 24-hour coffee bar, resident lounge and Hub by Amazon package receiver.
TriArch President Chris DeAngelis and Pebb Capital Principal & Managing Director of development and asset management Todd Benson, led the nine-month redevelopment. The project included substantial infrastructure upgrades, building system replacements and an interior renovation of common areas and 98 apartments.
DeAngelis said in prepared remarks the expedited construction schedule was necessary to ensure the building was ready for students by the fall of 2017. The redevelopment presented challenges including dealing with a property that was more than 100 years old and had existing tenants.
The success of The Alabama redevelopment and repositioning as a privately-owned, state-of-the-art student housing property, led the partners to a Morningside Heights site, where they are co-developing a ground-up, 153-bed property across from Columbia University.
Monarch Heights is slated for completion in July to serve students for the 2020-2021 academic year. The team broke ground on the project in December 2018. Located at 415 W. 120th St., the parcel was acquired earlier in 2018 for $20.3 million. The 14-story building will also offer community amenities including a fitness center, study area, coffee bar, outdoor terrace, rooftop deck, bike storage and package room.
“A theme consistent across both of these urban student housing projects is that our furnished, turnkey units, leased by the bedroom inside a fully-amenitized and secure building deliver a strong value proposition to potential tenants when compared to existing proximate housing stock,” Todd Rosenberg, co-founder & managing principal of Pebb Capital, told Multi-Housing News.
“The Alabama renovation, as with any renovation of a 100+ year old building, came with its own challenges when we got behind walls, which impacts the unit configurations ultimate unit mix. Those challenges don’t exist when building ground-up as we can design the precise unit mix and layouts that best align with market demand, but with ground-up construction comes a host of other challenges like labor and material cost escalations, geotechnical concerns and the like.”
Rosenberg said the move to an urban student housing strategy came after the real estate and private equity investment firm successfully repositioned eight distressed state school student housing assets. He noted those market were experiencing significant price appreciation and new supply and the firm decided to shift to urban markets “experiencing favorable supply/demand and imbalances that benefit from multiple demand drivers beyond just the university.”
In October, Pebb Capital sold The Rockland, a 372-unit student housing community in Lawrence, Kan., to NB Private Capital. Pebb Capital had owned the asset with 15 three-story buildings since 2014. After purchasing the Kansas property for $16 million, Pebb Capital made extensive renovations including adding a clubhouse, outdoor recreational space and updating the swimming pool and other features.
Since 2014, Pebb Capital has acquired more than 5,500 student housing beds representing approximately $350 million of transaction volume, serving more than 12 universities across five states.