TODAY'S DEALS: NorthMarq Arranges $136.4M for Student Housing Portfolio

NorthMarq provides $136.4 million to recapitalize a student housing portfolio; NASH-Newland acquires 28 master-planned communities; and Spirit/Bascom form a JV targeting 5,000 units.

Diamond Student Housing Portfolio

Dallas—Stephen Whitehead, senior vice president/senior producer in NorthMarq Capital’s Dallas Regional office, arranged $136.4 million in permanent financing for the Diamond Student Housing Portfolio.

The portfolio consists of six Class A core student housing facilities with a combined total of 5,112 beds in 1,852 units. The properties are located near major university campuses in Texas, Georgia, Alabama, Mississippi and Kansas.

Financing was based on a five-year term at a rate of 4.02 percent interest-only and was arranged for the borrower, Diamond Realty Investments and Real Estate Capital Partners, by NorthMarq through its seller-servicer relationship with Freddie Mac.

According to Whitehead, during the past five years, student housing has become a very favorable product type with investors and lenders for a few key reasons. First, the product type experienced stability through the recession. Also, college markets have been easier to quantify the supply and demand to justify investment or new development and have had substantial enrollment growth with little on-campus housing being built. In some cases, older dorms were torn down, but there was a net loss in beds when new on-campus housing was rebuilt. Universities have focused their resources to build academic buildings and let the private sector build new housing.

“Diamond Realty Investments understands the student business and is geared up to expand its footprint. They have a very high-quality student housing portfolio and an operations team that keeps their properties performing at best-in-class. Freddie Mac came through with very attractive terms to meet all of the requests of the borrowers and with a very smooth closing,” Whitehead says.

Armand Charbonneau, Chief Investment Officer of Diamond Realty Investments says, “NorthMarq told us what to expect, and then delivered mortgage financing with flawless execution. They made it look easy.”

Diamond Realty Investments, Inc. has provided equity for multifamily joint ventures since 1991. The company began Student Housing investments in 1999 and has since provided the equity for new developments in 10 states. Diamond forms partnerships with developers and management companies using its in-house asset management and capital markets capabilities.  Diamond is actively expanding its Student Housing presence.

Sekisui House/Newland Real Estate acquires 28 master-planned assets

San Diego—North America Sekisui House LLC (NASH) and Newland Real Estate Group LLC have formed a new joint venture, Nash-Newland LLC, and completed their first acquisition—and it was a big one. The partnership bought the largest operating portfolio of residential master-planned communities in the United States.

Nash-Newland LLC now controls the interests of the California Public Employees’ Retirement System and American Newland Communities LP in 28 master-planned communities located in 15 markets in 11 states. Newland will continue its roles as the developer and manager of all the communities acquired. The transaction comprises approximately 16,300 planned single and multi-family residential units, and an additional 5,778 acres of land approved for commercial/retail use.

“This joint venture, the third and largest with Newland, represents a portfolio of some of the best communities in the country,” says Satoshi Yoshimura, NASH’s president and chief operating officer. “Myself and the leadership team at NASH are committed to continuing this success and looking for ways to integrate some of our company’s design and planning philosophies with Newland’s.”

Spirit/Bascom Group form JV targeting 5,000 units

Irvine, Calif.—New York-based Spirit Investment Partners LLC and California-based The Bascom Group LLC have formed a new joint venture targeting the acquisition of 5,000 units over the next few years. The joint venture, named Spirit Bascom Ventures LLC, will focus primarily on value-add multifamily acquisitions in the eastern United States.

Specifically, the joint venture will target Class B and C garden-style and mid-rise apartment buildings with 150 to 500 units. The entity will also consider portfolio transactions in primary and strong secondary markets. Spirit Bascom Ventures is already negotiating acquisition contracts.

“We are excited to be working with Bascom, worse entrepreneurial culture and successful track record of investing in value add multifamily properties throughout the West Coast and Southwest makes them an ideal partner to help executive the business plan of acquiring similar type properties in Eastern U.S. markets,” says David Nachman, principal of Spirit Investment Partners.

“Coming off the Great Recession, we are experiencing a market opportunity where new construction has been severely limited, demand drivers for apartment rents are highly favorable, and multifamily property operations have not only bottomed but are beginning a healthy recovery,” adds Jerome Fink, managing partners of Bascom. “The increased level of foreclosures in the B and C sector should provide a strong buying opportunity for the new venture with Spirit.”

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