TODAY’S DEALS: American Campus Communities to Buy 19 Assets

American Campus Communities announces big acquisition plans; Essex Property Trust buys a community in San Jose, Calif.; and Walker & Dunlop provides $70.2 million for a historical portfolio in Pennsylvania.

Kennesaw Lofts

Austin, Texas—American Campus Communities Inc. is pursuing the purchase of 19 student housing assets totaling 12,049 beds from affiliates of Kayne Anderson Capital Advisors for $862.8 million. The acquisition consideration consists of the assumption of $396.2 million of outstanding mortgage debt and $466.6 million in cash. The mortgage debt to be assumed currently has a weighted average interest rate of 5.28 percent per annum and weighted average term to maturity of 8.3 years.

“We believe these 19 select assets offer high-quality products and locations in Tier 1 markets,” says Bill Bayless, chief executive officer of American Campus Communities. “Furthermore, approximately 75 percent of the select portfolio is an average of 0.3 miles from campus in submarkets with barriers to entry. We are excited about this opportunity to create substantial value by overlaying our operating platform on this portfolio.”

The acquisition of 18 existing properties is expected to close in the fourth quarter of 2012. The acquisition of the single development property is expected to close during the third quarter of 2013.

The select portfolio consists of the following 19 assets:

  • The Lofts of Kennesaw, 795 beds, Kennesaw State University
  • Aspen Heights, 308 beds, Louisiana State University
  • The Cottages of Baton Rouge, 1,290 beds, Louisiana State University
  • The Lodges of East Lansing, Phases I and II, 1,049 beds, Michigan State University
  • The Province–Rochester, 816 beds, Rochester Institute of Technology
  • 25Twenty, 562 beds, Texas Tech University
  • 5 Twenty Five Angliana, 320 beds, University of Kentucky
  • 5 Twenty Four Angliana, 740 beds, University of Kentucky
  • The Province – Louisville, 858 beds, University of Louisville
  • Grindstone Canyon, 384 beds, University of Missouri
  • The Cottages of Columbia, 513 beds, University of Missouri
  • Forest Village/Woodlake, 704 beds, University of Missouri
  • The Cottages of Durham, 619 beds, University of New Hampshire
  • The Province–Greensboro, 696 beds, University of North Carolina at Greensboro
  • West 27th Place, 475 beds, University of Southern California
  • The Province–Tampa, 947 beds, University of South Florida
  • The Lofts at Capital Garage, 144 beds, Virginia Commonwealth University
  • RAMZ Apartments on Broad, 172 beds, Virginia Commonwealth University
  • The Province–Dayton, 657 beds, Wright State University

Essex Property Trust buys San Jose asset for $148 million

Willow Lake Apartments

San Jose, Calif.—Essex Property Trust Inc. has purchased Willow Lake Apartments in San Jose, Calif., for $148 million. The 508-unit property was built in three phases between 1989 and 1997. Amenities include two swimming pools, a resident lounge, fitness center, business center and a lake.

Essex has a $4.5 million renovation plan in the works. Willow Lake is located less than two miles from I-680, I-880 and the 101 freeways.

Walker & Dunlop provides $70.2M for Pennsylvania portfolio

Philadelphia, Pittsburgh and West Chester—Walker & Dunlop Inc. has provided $70.2 million in Fannie Mae financing to Reinhold Residential for a portfolio of historic properties converted to Class A multifamily assets. The portfolio consists of seven garden-style communities with over 628 units located in Philadelphia, Pittsburgh and West Chester, Pa. The borrower was Reinhold Residential.

Chocolate Works Apartments, Shadyside Commons Apartments, Sharples Works Apartments, The Touraine Apartments, Trinity Row Apartments, Waterfront I Apartments and Waterfront II Apartments are all historically significant properties and included on the National Registry of Historic Buildings. With the exception of Trinity Row Apartments (row houses) and The Touraine Apartments (once a residential hotel), the properties were once commercial or industrial buildings that were converted into apartments nearly 20 years ago. The refinance upgrades them to luxury living space, each offering a unique architectural style and top-of-the-line services and amenities. The combined average occupancy of the properties was over 99 percent at closing.

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