San Jose Student Housing Lands $150M Loan

AMCAL Equities has secured a $150 million floating rate senior bridge loan from ACORE Capital for a student housing tower in downtown San Jose, Calif. The Grad, a 260-unit, 1,002-bed Class A property, serves students at San Jose State University.

Located at 88 E. San Carlos St., The Grad is a block away from both SJSU and downtown San Jose. The asset has fully furnished units with studio and one- to four-bedroom floorplans. Penthouse units feature 11-foot ceilings and share an outdoor terrace with views of the campus, city and mountains.

Built in 2020, amenities include a 2,600-square-foot exercise center, pool, sun deck, jumbotron, study rooms, bike storage and a parking structure with 263 spaces. The 19-story building also has 14,889 square feet of ground-floor retail.

Residents are close to several public transportation options like Caltrain, BART and the VTA Light Rail as well as cafes and stores.

The oldest public university on the West Coast, SJSU has an enrollment of 36,000 students but has limited student housing. Beds are available for less than 25 percent of the students and market-rate apartments are among the most expensive in the country, according to Gortikov Capital.

Gortikov Capital, a boutique commercial real estate mortgage brokerage and investment firm based in Santa Monica, Calif., arranged the loan with favorable terms and limited structure due to the quality of the asset and AMCAL’s reputation and track record.

Bryan Gortikov, president of Gortikov Capital, led the capital markets team on behalf of AMCAL Equities and Percy Vaz, its founder and CEO. Gortikov and his team also secured a $150 million loan from CIM Group in November 2021 for AMCAL Equities and Star America to refinance the student housing property.

An active sector

The student housing sector has been busy in recent months with properties changing hands, financing deals closing and steady leasing.

The latest Yardi Matrix national student housing report found that 50 universities of the 200 surveyed hit at least 99 percent occupancy in September, including large schools such as Illinois State, Ole Miss, Oklahoma State, Oklahoma, James Madison, Purdue and Virginia Tech. Surveyed preleasing across Yardi 200 universities reached 94.5 percent at the end of the fall 2024 leasing season, down 10 basis points year-over-year, according to the same report. By September, more than half of Yardi 200 schools were at least 95 percent preleased.

Earlier this month, The Scion Group and an unnamed institutional investor acquired 14 student housing properties with a total of 8,724 beds for $893 million from Harrison Street. The properties are located near 13 universities including The University of Arkansas, Texas A&M and University of Missouri.

In another portfolio deal this month, Gilbane Development Co. and CBRE Investment Management formed a joint venture involving six student housing properties in Power 4 schools with a total of nearly 3,000 beds. The JV includes three operating properties and three that will be developed, including one at the University of California, Berkeley.