JV Invests $1B in Student Housing Portfolio

The 24 assets, purchased by Scion Student Communities, span 20 university markets and total 13,666 beds. Twenty-two of the properties were acquired from Harrison Street Real Estate Capital.

Scion Student Communities, a joint venture between Canada Pension Plan Investment Board, GIC and The Scion Group, has acquired a U.S. student housing portfolio for $1.1 billion. 

The portfolio comprises 24 assets across 20 university campus markets totaling 13,666 beds. The purchase includes 22 properties bought from Harrison Street Real Estate Capital and the recapitalization of two communities previously owned by Scion-affiliated private syndications. The properties were owned by five different Harrison Street funds in conjunction with multiple operating partners. Among the assets are 8N Lofts in Lincoln, Neb.; Annex in Oxford, Ohio; Atmosphere in Fayetteville, Ark.; Lux on Capitol in Indianapolis and Venue at Dinkytown in Minneapolis. 

“This is a compelling investment opportunity to efficiently build further scale in the U.S. student housing sector with a portfolio of high-quality, well-located properties in new and existing joint venture markets,” said Hilary Spann, managing director, Head of Americas, Real Estate Investments, CPPIB. “We believe the secular strength of the U.S. student housing sector will continue to deliver attractive risk-adjusted returns for the CPP Fund, and we look forward to continue growing the joint venture with GIC and Scion.”

Since inception in January 2016, the joint venture completed over $4 billion of investments through four portfolio transactions, in which $1.4 billion in equity capital was deployed. The national portfolio includes 73 student housing communities in 52 top-tier university markets, totaling 46,555 beds. CPPIB and GIC each own a 45 percent interest in the new portfolio and Scion owns the remaining 10 percent. 

Executive Managing Director of Marcus & Millichap’s IPA Student Housing Division Peter Katz, provided strategic consulting and DLA Piper represented Harrison Street in the transaction. In November, Harrison Street sold The Element, a student housing community serving students from California State University Sacramento. 

Images courtesy of Scion Student Communities