Pierce Education, Core Properties Buy 1,692-Bed Student Housing Complex in NC
- Feb 18, 2013
In a joint venture, Pierce Education Properties L.P. and Core Properties L.L.C. have just enhanced their portfolio with the addition of North Campus Crossing, a premier off-campus housing community near Eastern Carolina University in Greenville, N.C. The partners acquired the gated 600-unit property from North Campus Crossing L.L.C. in a transaction valued at $56.5 million.
The transaction included the joint venture’s assumption of an existing $26.8 million loan held by Midland Loan Services Inc., and the partners obtained financing in the form of a $19.8 million Freddie Mac Loan secured through HFF L.P.
“The student housing sector is continuing to attract increasing amounts of institutional debt and equity capital which is enabling us to facilitate our growth,” a spokesperson for Pierce told Commercial Property Executive.
A gated community featuring 1,692-beds, NCC sprouted up three miles from the Eastern Carolina Campus at 3800 Bostic Dr., in a two-phase development process that reached completion in 2006. While the purpose-built student housing property already features many of the luxury amenities that students practically demand these days–swimming pools, media room and tanning beds–the joint venture partners plan to take the offerings to a higher level with the investment of $1 million in upgrades.
“Amenity packages and residential life programs provide state-of-the-art features, social activities and a strong sense of community that is attractive to students,” the spokesperson said.
The student housing market remains solid. As per a to a third quarter 2012 report by the National Student Housing Council, gross market rent increased 11.4 percent per bed year-over-year and rental income jumped 2.7 percent per bed. Pierce believes there’s no end in sight to the high demand in the sector. According to the company’s spokesperson, demand will remain strong given the “strong pattern of enrollment growth in higher education across the country.” And non-traditional off-campus accommodations aren’t expected to fall out of favor.
“Much of the millennial generation when living at home had their own bedrooms; the current product type of private bedrooms and bathrooms in purpose-built student housing provides what students wants,” the spokessperson concluded
For Pierce, the addition of NCC to its portfolio brings the company’s total purchases up to approximately $350 million since 2007. Like the demand for student housing, Pierce will continue to move onward and upward. The company is keeping its eye on properties near public universities with enrollments of 15,000 students or more. Another part of the purchasing guidelines has a little something to do with sports; the schools should be participants in Division 1/(FBS) football.
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