Ashland Pacific JV Targets West Coast Student Housing with $150M

In a partnership with Integrated Capital Management, the firm picked up a nine-property portfolio near USC for its first purchase.
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Ashland Pacific Integrated, a new joint venture formed by two Los Angeles-based firms to acquire and manage $150 million of student housing properties on the West Coast, has made its first purchase, acquiring an $18 million portfolio of student housing assets located within a mile of the University of Southern California campus.

The nine properties have a total of 84 beds and are currently 94 percent occupied. The portfolio immediately places API among the top owner/operators of student housing for USC students. Dan Lewin of Marcus & Millichap represented API in the transaction.

The JV was formed by Ashland Pacific, a vertically integrated real estate firm, and Integrated Capital Management, an investment management firm. Ashland Pacific will be the managing member of API with primary responsibility for the venture’s day-to-day operations. API combines the longtime student housing and institutional expertise of Ashland Pacific with the extensive private equity and advisory platform of ICM. The new acquisition has grown Ashland Pacific’s student housing owned/managed portfolio to 40 properties valued at nearly $70 million around USC.

Investment goals

Julio Davila, CEO & president of Ashland Pacific, said in a prepared statement the goal of the JV is to take the firm’s proven acquisition and management model and quadruple its assets over the next five years. Ashland Pacific was created last year but both Davila and COO Troy Dodgion have been active in the USC market for the last five years and Dodgion has about 15 years overall experience in the student housing sector. Both Ashland Pacific executives previously worked at institutional firms in commercial real estate. 

When they formed the JV with ICM, the decision was made to start in their own backyard near USC and make a large impact on the downtown Los Angeles student housing market, Davila said. The executives noted only about 15 percent of student housing needs at USC are provided on-campus, mostly for freshman. The JV is positioned to capitalize on the demand for off-campus alternatives for undergraduate and graduate students.

John Carrick, ICM co-founder & managing principal, said in prepared remarks many investors are attracted to the resilience student housing offers in any economic climate. He said ICM had seen the value Ashland Pacific has already delivered for its stakeholders and expected the new joint venture would lead to impressive returns by expanding the proven business model.

With a plan to use the JV to scale up the student housing platform, API will be looking at other West Coast locations.

“We have no concrete plans to announce yet, but appealing markets on the West Coast include Washington state, Southern California, Nevada and Colorado,” Davila told Multi-Housing News.