Jones Lang LaSalle Closes $125M Debt and JV Equity Raise for Student Housing

Jones Lang LaSalle arranges a joint venture partnership between The Collier Companies and Madison International for student housing properties, and NorthMarq Capital closes on a construction loan and tax credit bridge facility.

Gainesville, Fla. — Jones Lang LaSalle’s Capital Markets experts arranged a joint venture partnership between The Collier Companies and Madison International for a two-property portfolio of student housing properties in Florida valued at roughly $125 million.

Freddie Mac provided the $86.7 million in debt for the portfolio, The Enclave and Seminole Grand, while Madison International Realty, through the vehicle of a joint venture partnership, acquired an 80 percent interest in the existing ownership entity.

Leading the Jones Lang LaSalle team on the offering was Executive Vice President James Tramuto and Managing Directors Jubeen Vaghefi and Denny St. Romain.

“This joint venture is really a great real-time example of a trend that we have been seeing in the student housing market for quite some time, which is new institutional capital coming into the space with an appetite for quality product and quality sponsors,” Tramuto says. “This is Madison’s first investment in the student housing space, and while the returns and asset quality were certainly attractive selling points, the overwhelming drivers for the company’s investment in a new asset class were the strength of the sponsor and the ‘student housing story’.”

The Collier Companies based out of Gainesville, Fla. is a trophy-class owner/operator in the student housing industry. The company is currently the second largest student housing owner in the country with a 95 percent occupied portfolio that exceeds 22,000 beds.

The senior mortgage loan on Seminole Grand is a $44.85 million fixed-rate loan at 5.17 percent, with a seven-year term and one year of interest-only amortization. The senior mortgage loan on the Enclave is a $41.86 million fixed rate loan at 5.16 percent, also with a seven-year term and one year of interest-only amortization.

The Enclave, which is adjacent to the University of Florida campus and just 10 minutes from Santa Fe College in Gainesville, is a Class A, 531,360-square-foot property featuring 412 units. The property offers a total of 13 buildings with 1,076 beds and is 97 percent occupied as of fall 2010. It was renovated in 2008.

Seminole Grand is located about 1.5 miles from Florida State University in Tallahassee. It is less than six minutes from Tallahassee Community College and nine minutes from Florida Agricultural and Mechanical University. The 557,640 square-foot property features 486 apartment homes. The property offers a total of 36 buildings with 1,554 beds and is 98 percent occupied as of fall 2010. It was also renovated in 2008.

NorthMarq arranges construction loan and tax credit bridge facility

Baltimore–Bill Libercci, vice president, and Nancy Ferrell, senior vice president and managing director, both of NorthMarq Capital’s Baltimore Regional office, arranged a construction loan and tax credit bridge facility for Gunther Square located at 1211 South Conkling Street in Baltimore.

The property will contain 162 multifamily units plus retail space. Financing was arranged for the borrower, a joint venture of Obrecht Commercial Real Estate, Kinsley Properties and Focus Development, by NorthMarq through its relationship with RBS Citizens Bank.

Libercci says this financing allowed the borrower to renovate the Gunther Main Brewery into a LEED-certified multifamily community using historic tax credits. He says, “The redevelopment of the Gunther Main Brewery Building, which has been vacant and deteriorating for 37 years, represents the latest phase in the renaissance of Brewers Hill. It took the talented development team of Wells Obrecht, Kinsley Properties and Focus Development together with a flexible lender in RBS Citizens Bank to pull off this very complicated historic renovation. This is a great project for Baltimore.”