Coastal Ridge Secures Refi for 2 Indiana Student Housing Properties

Fifth Third Bank provided the loan for Overlook at Notre Dame and Irish Flats, serving students attending the University of Notre Dame.
Irish Flats. Image courtesy of TSB Capital Advisors

TSB Capital Advisors has arranged a $42.5 million refinancing with the lowest rate the company has ever secured for two student housing properties. The portfolio includes Irish Flats and Overlook at Notre Dame, two off-campus student housing properties a block away from the University of Notre Dame in Indiana.

TSB arranged the refinancing for the portfolio’s owner, Coastal Ridge Real Estate, and the loan was provided by Fifth Third Bank. The refinancing comes at a 2.3 percent fixed rate on a five-year term and is the first time Fifth Third has worked with Coastal Ridge in the student housing market.

Located at 18490 Dunn Road, Irish Flats offers 98 units through one-, two- and three-bedroom floorplans, according to Yardi Matrix data. The fully furnished apartments include free cable and Wi-Fi, a 50-inch TV, private bathrooms for all bedrooms and an in-unit washer and dryer. The property’s amenities include a fitness center, a sand volleyball court, a community park, a clubhouse lounge and barbecue grills.

Less than a half mile away, Overlook at Notre Dame is located at 54721 Burdette St. and offers 360 units through studio, one- and two-bedroom floorplans, according to Yardi Matrix data. The community’s units are also fully furnished but were purpose-built for graduate students and faculty. The property’s amenities include a fitness center, private study rooms and a community lounge.

The portfolio was constructed in three phases between 2013 and 2016 and has maintained a 95 percent occupancy rate during the 2019-2020 academic year. The two communities offer a combined 555 beds and are also still seeing more than 99 percent of rents being paid despite the economic conditions caused by COVID-19 pandemic.

TSB’s Ian Bradley told Multi-Housing News that the company also worked with this Coastal Ridge portfolio last year by securing a new investor through a recapitalization. Bradley also told MHN that TSB has worked with Coastal Ridge for many years on different student housing properties. In February, Coastal Ridge sold a student housing property in Wilmington, N.C. for $27 million.

LOWEST RATE ARRANGED

With the Indiana portfolio, TSB was able to achieve the lowest rate the company has ever arranged for a student housing term loan, Bradley said in his prepared remarks. Bradley told MHN that TSB began negotiations with Fifth Third Bank prior to the COVID-19 pandemic and the lender honored the initial agreement terms. He added that the interest risk rate could go both ways but benefited Coastal Ridge in this instance.

”The attractive initial terms combined with compression in swap rates once the markets reacted to the pandemic, is what ultimately led to the record low interest rate,” Bradley told MHN. “Because the lender required an interest rate hedging instrument be obtained at closing, the final rate wasn’t locked until the day of close.”