Financing has been procured for the acquisition of Thrive in Lubbock, a garden-style student housing community located 2.5 miles from Texas Tech University’s academic core along the northwest shuttle route. The five-year 65% loan-to-cost floating-rate loan was provided by East West Bank and features three years of interest-only payments, along with an escrow for funding future improvements and no prepayment penalty.
Benjamin Roelke and Ian Walker with CBRE capital markets’ debt and structured finance team in Dallas arranged the financing for the second acquisition in a newly formed joint venture between TEXLA Housing Partners and a private equity real estate fund advised by Crow Holdings Capital.
“The strength of the sponsorship and the value-add strategy was attractive to lenders,” said Roelke. “In this case, exceptional financing terms were achieved by having a great lender who understood the unique market supply dynamic that was backed with a best-in-class experienced sponsor and well-positioned property.”
The 744-bed/264-unit mid-rise student housing community located at 210 N. Winston Ave. was completed in 2004 and recently received more than $1.6 million in renovations that included updating the clubhouse, fitness center and amenity areas. New ownership plans to complete the renovation by upgrading unit interiors with new appliances, flooring, furniture and fixtures.
“As investor appetite for value-add opportunities in student housing remains strong, we have seen an abundance of debt capital available for those same strategies,” Roelke tells GlobeSt.com. “The lender community has demonstrated substantial interest in following quality sponsorship into this space.”
As the 2019 pre-leasing season nears its end and college students throughout the nation prepare to move into student housing apartments, a few universities are standing out for rent growth. Across the nation, student housing rents were up 1.7% as of June, essentially in line with 2018’s level of 1.6%. As usual, the universities commanding the strongest rent growth performance ran head and shoulders above the national norm, according to research from RealPage.