Preferred Apartment Communities has sold out of the student housing sector by selling an eight-property portfolio to TPG Real Estate Partners for $478.7 million. CBRE marketed the portfolio and the transaction is expected to close in the fourth quarter of 2020.
The portfolio totals 6,095 beds spread throughout Arizona, Florida, Georgia, North Carolina and Texas. In Texas, the portfolio includes the 808-bed The Tradition in College Station, the 556-bed The Block in Lubbock and the 840-bed Ursa in Waco. The portfolio also includes two properties in Florida, the 679-bed NxNW in Tallahassee and the 894-bed Knightshade in Orlando. The remainder of the portfolio includes Sol, a 639-bed property in Tempe, Ariz., Stadium Village, a 792-bed property in Kennesaw, Ga., and Rush, an 887-bed property in Charlotte, N.C.
John Isakson, CFO of PAC, told Multi-Housing News that the company accumulated the student housing portfolio throughout the years dating back roughly four and a half years ago. He also told MHN that PAC had previously expressed wanting to exit the student housing sector and that now was a good time to exit.
Joel Murphy, PAC’s president & CEO, said in prepared remarks that this sale improves the company’s balance sheet and PAC will simplify its focus on its core multifamily business in the Sunbelt states. In May, PAC purchased a 288-unit community in Panama City, Fla., that was completed last year. That acquisition came on the heels of another PAC purchase of a 392-unit community in Wesley Chapel, Fla., in April.
ENTERING THE STUDENT HOUSING SECTOR
The new owners of the student housing portfolio will be working with Cardinal Group, a property management company, to enhance the assets by investing in unit renovations and amenities, Ty Newell, principal at TREP, told MHN.
Newell also told MHN that the portfolio acquisition marked TREP’s entry into the U.S. student housing sector. He added in prepared remarks that the properties were well-positioned to weather the impact from the COVID-19 pandemic. Newell told MHN that the student housing sector will be a “strong thematic focus” for the company as it looks for similar opportunities.