Company To Acquire Student Complexes In Oregon, Seattle And Arizona For $590 Million

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Company To Acquire Student Complexes In Oregon, Seattle And Arizona For $590 Million

A student housing owner, manager and developer has entered into an agreement to recapitalize and ultimately acquire seven select student complexes including those in Oregon, Seattle and Arizona according to a release.

The portfolio investment focuses on strategic growth in seven key Power-5 conference and state flagship university markets, and includes 3,776 beds.

The $590 million transaction by American Campus Communities, Inc, from affiliates of Core Spaces and DRW Real Estate Investments, includes the acquisition of two existing student complexes, two communities opening in fall 2017, and three projects under-construction scheduled for completion in fall 2018, with closing and funding events scheduled to occur in a staged manner over approximately two years, allowing for optimal integration and funding.

“Core Spaces and DRW have developed some of the finest student housing properties in the country,”  Bill Bayless, American Campus Communities CEO, said in the release.

 “The properties we have strategically selected in this portfolio are located in Power-5 conference and state flagship university markets that meet the highest levels of our investment criteria of differentiated products in close proximity to campus in submarkets with high barriers to entry. With the implementation of our operating platform across the portfolio, we should achieve meaningful accretion in asset value as well as additional operational efficiencies within the five markets where we have existing properties,” Bayless said.

Oregon property in Eugene

Hub Eugene, built in 2015, contains 513 beds located pedestrian to the University of Oregon and offers potential operational synergies with the company’s existing property, 2125 Franklin, as well as diversifying the company’s product offering, location and price points within the market.

Acquisition in Seattle

Hub at U District Seattle, which the company has an exclusive option to acquire, contains 248 beds located pedestrian to the University of Washington.

Assuming exercise of the company’s option in October 2017, the acquisition of this asset is in concert with the company’s recently announced strategy to expand its presence in the University of Washington market, one of the most underserved Power-5 markets in the country.

Student complexes in pre-sale in Arizona, Michigan and Indiana

Hub Flagstaff, Hub Ann Arbor, and  Hub West Lafayette, represent the three under-construction student complexes scheduled for delivery in Fall 2018, totaling 1,500 beds. The assets are located pedestrian to the University of Michigan, Purdue University and Northern Arizona University, respectively, representing two Power-5 conference markets and an existing ACE campus - all university markets in which the company has extensive history.

The company funded an initial investment of $24.2 million through a joint venture with Core Spaces/DRW Real Estate Investments in August and expects to increase its investment by $130.6 million upon delivery of the assets in Fall 2018, with an option to purchase the remaining interests in the third quarter of 2019 for an amount to be determined by fair market value, expected to approximate $85.2 million in aggregate, subject to satisfactory completion and delivery of such properties.

Upon the initial funding of each property, American Campus Communities assumes sole operational control, while Core Spaces/DRW Real Estate Investments will retain certain limited decision making abilities including responsibility for the development and delivery of the in-process development properties. The acquisition is subject to adjustment to total consideration based on stabilized property tax assessments, various earn-out adjustments and closing conditions including satisfactory completion of the properties currently under construction by Core Spaces/DRW Real Estate Investments. Therefore, there can be no assurance with respect to the timing of the closing of any of these transactions or whether these transactions will be completed.

About American Campus Communities

American Campus Communities, Inc. is the largest owner, manager and developer of high-quality student housing communities in the United States. The company is a fully integrated, self-managed and self-administered equity real estate investment trust (REIT) with expertise in the design, finance, development, construction management and operational management of student housing properties. As of June 30, 2017, American Campus Communities owned 160 student housing properties containing approximately 99,000 beds. Including its owned and third-party managed properties, ACC's total managed portfolio consisted of 197 properties with approximately 128,700 beds

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