Greystar to Buy Portfolio of Student Housing Assets in UK
- Sep 30, 2013
Greystar Real Estate Partners, in partnership with Goldman Sachs, has agreed to acquire a portfolio of United Kingdom-based student housing assets out of the bankruptcy administration proceedings for the Opal Property Group.
This marks Greystar’s first-ever acquisition in the U.K. and the company has also opened an office in London as it looks to build its presence on the other side of the pond.
“We believe the U.K. marketplace is rife with opportunities in both the private rental sector and in student accommodations and think there is an opportunity for Greystar to become a significant player in both,” Bob Faith, Greystar’s founder & CEO, told Commercial Property Executive. “There is strong demand for rental housing in the U.K. yet a void of high-quality product to fill that demand. In addition to our plans to acquire more existing assets, we are also exploring the possibility of building new rental housing and believe that there is a lot of opportunity on the development side.”
In total, the portfolio consists of 21 assets principally located in London, Manchester, Leeds and Liverpool. It’s comprised primarily of high-quality buildings and locations, but Faith said it has suffered from a lack of capital investment, which has inhibited the properties from realizing their full potential.
“These weren’t distressed properties, but rather good assets that suffered from a distressed capital structure that caused them to fall into administration,” Faith said. “We also saw it as a benefit that many of the properties in this portfolio are partnered with outstanding universities. We see the universities as important partners to our business and look forward to cultivating and growing relationships with them to provide best-in-class service and housing to their students.”
Greystar is the largest operator of apartment communities in the United States, with more than 215,000 apartments under management. While Greystar is primarily known for its conventional multi-family expertise, the company also has deep roots and extensive experience in student housing, having managed more than 59,000 beds in the student space over the past 15 years.
“From an investment standpoint, it’s a good sector with countercyclical fundamentals that enable it to weather downturns much better than many real estate asset classes,” Faith added. “It’s also very operationally intensive, so the impact that can be made through strong operations is more pronounced, which creates a lot of opportunity for us when you consider our intense focus on property management and marketing.”
The acquisition is expected to be completed by the end of October.