Tucson, Ariz.—EdR (Education Realty Trust) has acquired a 764-bed student housing community, The District on the 5th, which is near the University of Arizona in Tucson, from Residential Housing. The property, which features two-, three- and four-bedroom apartments, opened for student occupancy in September.
The buyer paid $67 million for District on the 5th. The property is 99 percent leased for the 2012-2013 academic year with an average monthly lease rate of $633 per bed. The purchase price represents about a 6.3 percent cap rate on expected next 12 months’ net operating income, according to EdR.
The property is LEED silver certified. Common amenities include a pool with beach entry, clubroom, spa, computer lab/business center and an outdoor movie theater. Each unit includes a full kitchen with granite countertops and stainless steel appliances, nine-foot ceilings, and a washer and dryer.
The University of Arizona’s Tucson campus has a total enrollment of about 38,000 undergraduate and graduate students. Current on-campus housing consists of slightly less than 6,800 beds. The Arizona Board of Regents has said that it expects enrollment at the school to increase 13,000 by 2020, so demand for nearby housing is also expected to be consistently strong.
The sale was brokered by Institutional Property Advisors (IPA), a division of Marcus & Millichap. Peter Katz, an IPA executive director, advised the seller in the deal.