Värde, Hawkins to Land $431M for Student Housing Portfolio
The note refinances three properties totaling more than 2,400 beds.
A joint venture between Värde Partners and Hawkins Way Capital will obtain a $431 million CMBS loan for Monarch Portfolio, a collection comprising three student housing communities in New York City and Boston, according to a Morningstar DBRS report. The properties total 2,407 beds across 1,257 units.
Goldman Sachs Bank and Wells Fargo Bank will originate the two-year, interest-only note with three one-year extension options. Deutsche Bank National Trust Co. will serve as trustee. The deal is expected to close at the end of this month.
Proceeds will be used to refinance $383.5 million of total existing debt. Another $12 million will represent closing costs and the remainder will return to the sponsors as equity.
The refinanced properties include:
- FOUND Study Turtle Bay, a 1,134-bed high-rise in Midtown Manhattan
- FOUND Study Brooklyn I & II, a 342-bed community in Brooklyn
- FOUND Study Back Bay, an 800-bed student property in Boston
The average year built across the student communities is 1947. The portfolio is 96.4 percent occupied for the current academic year.
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Student housing properties had an estimated final occupancy of 95.1 percent across Yardi 200 universities as of September, according to a recent Yardi Matrix report, underscoring steady student housing market demand despite slower rent growth. The annual rent increase clocked in at 0.8 percent, the slowest since the data provider started tracking the sector in 2017.
A northeastern student housing portfolio
FOUND Turtle Bay is the adaptive reuse of the 1923-complete Marriott Hotel East. The venture purchased it in 2022, converted it into student housing and implemented a $28.4 million capex plan. The property is at 525 Lexington Ave., less than 2 miles from CUNY Hunter College.
FOUND Brooklyn comprises two buildings completed in 1968 and 1987. The properties were converted from residential to student housing in 2019, after Hawkins Way implemented a $10 million capex program. Värde became part owner of the property in 2021. Located at 97 and 119 Columbia Heights, the complex serves St. Francis College.
Originally built in 1975, FOUND Back Bay was previously a hotel as well. The community is the redevelopment of one of the towers at Sheraton Hotel, which was completed in 2022. The owner acquired it for $233 million and conducted a $33.5 million renovation. The high-rise is at 39 Dalton St., 1 mile from Northeastern University.
