Student Housing Portfolio Changes Hands for $893M

The Scion Group and an unnamed institutional investor have acquired 14 student housing properties for $893 million from Harrison Street. The assets total 8,724 beds and are located near U.S. universities.

The student housing portfolio has been amassed over the last decade and spans eight different Harrison Street fund vehicles. The properties are in 11 states near 13 different universities, including the University of Arkansas, Texas A&M and University of Missouri.

With this transaction, the Scion Group now owns and operates 140 communities in 82 campus markets across 35 states. The company, a student housing specialist since its founding in 1999, has over $10 billion of assets under management, and has had a considerable appetite for acquisitions lately.

In March, the Chicago-based Scion, in a joint venture with an institutional investor, acquired a controlling interest in The Aves at Twelve100, a 1,527-bed student housing community near the University of Central Florida in Orlando. In July, the company, also in a JV, acquired Reflection, a 741-bed student housing community a block from Georgia State University in downtown Atlanta.

Harrison Street, also based in Chicago, is another major player in the student housing market and one of the largest private owners of such assets worldwide. Since its inception, Harrison Street has invested over $22 billion across 410 student housing properties, totaling more than 222,000 beds, in North America and Europe. During the same period, the firm sold 212 student housing properties for over $8.8 billion.

The company recently closed its ninth U.S. opportunistic real estate fund, Harrison Street Real Estate Partners IX, LP, with about $2.5 billion in equity commitments. When it closed, the fund had allocated almost 70 percent of its total equity in 70 assets, with the largest concentrations in student housing, senior housing and data centers.

Harrison Street sees a growing interest in alternative real estate, and is on pace to close over $4 billion of dispositions in 2024 from nine distinct funds across student housing and other sectors, such as senior housing, healthcare, and infrastructure, according to Harrison Street Head of Asset Management–North America, Ben Mohns.

Good times for student housing

Overall, the U.S. student housing sector is enjoying strong fundamentals, though not overheated. Occupancy for the 2024-2025 season came in at 94.5 percent in September, only 10 basis points lower than at the same point the previous year, according to Yardi Matrix data.

Moreover, the new leasing season points toward a good start for the next year, averaging 10.2 percent preleased, Yardi Matrix notes. Four schools in the study had already hit 25 percent occupancy via preleasing in September.

Yardi Matrix forecasts that in 2024 a total of 41,432 beds will be delivered at the 200 major schools that the company tracks, which would mark a 5 percent decrease compared to last year. During the last months of the 2024-2025 leasing season, the average advertised rent per bed edged down from a $901 maximum in May to $896 in September.