Goldman Sachs Partners with Core Spaces on $600M Portfolio

The partnership will recapitalize and develop nine student housing properties near major public universities in the South, West and Midwest, totaling more than 4,300 beds.
Hub Orlando. Image courtesy of Kevin Kaminski Photography 2018

Student housing developer and operator Core Spaces has forged a partnership with Goldman Sachs to recapitalize and develop a portfolio of nine properties valued at more than $600 million. The assets consist of seven operating properties and two buildings under development, with a total of more than 4,300 beds catering to students at universities across the South, West and Midwest U.S.


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The transaction between Core Spaces and affiliates of the Merchant Banking Division of Goldman Sachs will kick off an ongoing partnership to build a joint-venture student housing platform across the U.S., according to an announcement by the companies. The stake purchased by the investment bank is undisclosed.

The expansion of higher education is drawing institutional investors to the asset class. “Demand for student housing is highly correlated with university enrollment growth,” commented Core Spaces Chief Investment Officer John Wieker to Multi-Housing News. He pointed out that the U.S. Department of Education projects that enrollment growth nationwide will average 1.5 percent over the next 3 years.

“In addition, only 11 percent of the current stock of student housing product is off-campus, pedestrian, purpose-built product, which provides continued opportunity to replace aging non-purpose-built product with new housing tailored to the needs of today’s students,” Wieker noted.

“Also, further university enrollment growth has proven to be recession resilient with enrollments growing during periods of growing unemployment,” he added. “This resiliency provides student housing with a level of insulation against some of the negative economic factors other real estate landlords face during downturns.”

A history of partnerships

Founded in 2010, Core Spaces has experience teaming up with some of the country’s biggest owners of student housing. American Campus Communities agreed to recapitalize and acquire a $560.6 million, seven-property portfolio from Core Spaces and DRW Real Estate Investments in 2017. That followed a deal in which Core Spaces partnered with EdR, now Greystar, to build a 707-bed high-rise community called The Hub in Minneapolis.

Core Spaces’ latest deal involves a portfolio spread across Alabama, Arizona, Florida, Indiana, Kentucky and Michigan. The communities are located near major public universities and fall under Core’s Hub on Campus, State on Campus and The Collective brands, including:

Operating properties (2018)

  • Hub on Campus Orlando (745 beds) – University of Central Florida in Orlando, Fla.
  • Hub on Campus Tuscaloosa (481 beds) – University of Alabama in Tuscaloosa, Ala.
  • State on Campus Tuscaloosa (174 beds) – University of Alabama in Tuscaloosa, Ala.

New developments (2019)

  • Hub on Campus Tucson – Speedway (183 beds) – University of Arizona in Tucson, Ariz.
  • Hub on Campus West Lafayette – State St. (608 beds) – Purdue University in West Lafayette, Ind.
  • Hub on Campus Lexington (492 units) – University of Kentucky in Lexington, Ky.
  • Hub on Campus East Lansing (577 units) – Michigan State University in East Lansing, Mich.

Under development (2020+)

  • The Collective at Main Gate (605 units) – University of Arizona in Tucson, Ariz.
  • Tucson Park Ave (Hub 4) (499 units) – University of Arizona in Tucson, Ariz.