VerTex Expands Student Housing Portfolio
VerTex acquired a 792-bed student housing development, marking the fourth transaction in a growing partnership with Harrison Street Real Estate Capital.
Chicago—VerTex Student Housing Partners, a joint venture between Vermilion Development and Texla Housing Partners, acquired The Element, a 288-unit, 792-bed student housing development at Sacramento State University, marking the company’s fourth transaction in a growing partnership with Harrison Street Real Estate Capital.
VerTex has been growing its student housing portfolio, with this transaction bringing the company’s acquisition total with Harrison Street to 3,200 beds and expanding its geographic reach. In May 2014, the partnership acquired a 234-unit, 936-bed student housing development at Florida State University for $24 million.
“The Element offers residents a strong value proposition and is uniquely positioned to capitalize on Sacramento State’s continued transition from a commuter to residential university,” said Justin Gronlie, vice president at Harrison Street.
Shawn Sweeney, senior vice president at TSB Capital Advisors arranged the acquisition loan with Capital One.
The Element, as it’s known locally, was originally constructed in 2004 and consists of 18 three-story residential buildings with garden-style apartments. The property also has a clubhouse and leasing office. VerTex and Harrison Street plan to make operational and capital improvements to the property and VerTex Student Housing Managment will be the property manager.
“VerTex Student Housing Partners has a programmatic acquisition strategy to acquire assets that are of relatively new vintage (around 10 years old). We also look for purpose-built student housing properties that, with execution of a carefully scripted capital improvement program, can produce extraordinary financial returns. The Element project fits that mold perfectly and the fact that it is located in a high-barrier-of-entry market makes it even more appealing,” Roger Phillips, CEO of Texla Housing Partners, told MHN.
He added that interior upgrades are coming to the property, which will allow residents to “enjoy aspects of new construction without having to bear the burden of new construction rental rates.”
“Our plan is to make improvements largely to the interior of the units by adding new appliances, light fixtures, window treatments and flat-panel TVs in select units. The bones of the asset, originally developed by Dallas-based JPI, are very good so other improvements to the amenity spaces, exterior and landscaping are largely cosmetic but thought to be impactful,” Phillips told MHN.
The property is planned to bring in undergraduate and graduate students of the university. Unit amenities include full-size washers and dryers, microwaves and dishwashers, as well as access to the internet and digital satellite. Residents can also enjoy a resort-style swimming pool and hot tub, half-size indoor basketball court, fitness center and sand volleyball court, game room, student lounge and a private shuttle to the CSUS campus.
Leasing is currently underway for the 2016-2017 academic year.
Photos courtesy of Element Student Living