HFF Arranges $230M for Six-Property Multi-State Student Housing Portfolio

HFF arranges $230 million for a student housing portfolio; IPA brokers a 268-unit sale for AvalonBay; and Sperry Van Ness - Imbrie Realty completes a $5.5 million value-add transaction in Oregon.

Austin, Texas—HFF has arranged $230 million in financing for a six-property student housing portfolio totaling 1,496 units/4,799 beds across multiple states.

HFF worked exclusively on behalf of the borrower, Aspen Heights, to secure six separate loans that included five years of interest only loans through Morgan Stanley Mortgage Capital Holdings Inc.  The securitized loans will also be serviced by HFF. Loan proceeds were used to refinance the original construction debt on the properties.

The properties in the portfolio were completed in 2013 and are approximately 95 percent leased for the spring 2014 semester. Individual property details are listed below:

Deal Chart

The HFF team representing the borrower was led by senior managing director Doug Opalka, director John Chun and associate director Casey Wenzel.

Aspen Heights, headquartered in Austin, Texas, is a student housing developer and manager focused on “re-thinking” student living by building neighborhoods of American Craftsman-style homes with all the amenities of a luxury apartment community.

AvalonBay completes $53.3M apartment disposition in Connecticut

Avalon Valley 2-11-14Danbury, Conn.—AvalonBay Communities Inc. has sold a 268-unit garden-style apartment in Danbury, Conn., for $53.3 million. Institutional Property Advisors arranged the sale of Avalon Valley, which was acquired by Ergs Konover/Outlook Holdings.

The apartment community is located at 53 Sand Pit Road in Danbury, Conn., near Connecticut Route 7 and Interstate 84. The location is near multiple transportation routes, close to Danbury Hospital, two miles from the Danbury Metro-North Railroad station and 15 minutes from the train station in Brewster, N.Y.

“Avalon Valley is a high-quality community with a central location that serves the needs of both lifestyle renters and transit-oriented residents who work in Fairfield and Westchester counties, Stamford and New York City,” says Steve Witten, an executive director at IPA, who represented AvalonBay in the sale alongside fellow executive director Victor Nolletti, senior associate Adam Mancinone and associate Blake Barbarisi.

Built in 1998 on 17.5 acres, Avalon Valley consists of 11 detached three-story buildings, one of which is a clubhouse. Residents can choose from nine floor plans ranging from 769 square feet to 1,494 square feet. Community amenities include a clubhouse with resident lounge, business center with kitchen, an indoor basketball court, a state-of-the-art fitness center, heated outdoor swimming pool, landscaped picnic and barbecue areas, and a children’s playground.

“A comprehensive review of comparable properties strongly suggests that the new owner can enhance value by implementing a moderate upgrade program that will increase value and keep overall per-square-foot and per-unit pricing well below that of newer properties,” adds Nolletti.

Sperry Van Ness sells an 84-unit asset in Oregon

Kings Landing ApartmentsCorvallis, Ore.—Hugh Holtman and Carson Halley of Sperry Van Ness – Imbrie Realty have arranged the sale of an 84-unit community in Corvallis, Ore. The transaction occurred 15 months after the duo landed exclusive listing rights for the property, which is known as Kings Landing Apartments. An investment group led by Westland Apartment Investors picked up the asset for $5.5 million.

It took roughly six months and multiple offers to find a suitable buyer, who purchased the asset as part of a value-add play. The sales price represents a CAP rate of 6.65 percent on in place income. A plan is in place to convert the complex into a student housing property after an extensive renovation.