Safanad, Aspen Heights Go Back to School

Global principal investment firm Safanad has made its first major investment in U.S. student housing.
AspenHeights

An Aspen Heights property

By Gail Kalinoski, Contributing Editor

Global principal investment firm Safanad has made its first major investment in U.S. student housing, joining forces with developer and operator Aspen Heights Partners by investing in an eight-property portfolio valued at more than $400 million and targeting future acquisitions.

The strategic partnership calls for the two firms to target new student housing properties at large universities, both new ground-up developments and new but stabilized student housing properties currently owned by Aspen Heights and its investment partners.

As part of the agreement, Safanad and Aspen Heights will recapitalize the ownership of a portfolio of student housing properties currently owned by Aspen Heights and its investment partners. The portfolio, which has over 6,000 beds, has a purchase price of over $400 million. The companies declined to say which properties are part of the deal.

It is the largest investment received to date by Aspen Heights, which has doubled in size nearly every year since it was founded in 2006. The firm, which has developed, marketed and managed at least 15 student housing properties, has expanded into multi-family and assisted living developments and has a full pipeline of projects planned, according to its website. In its student housing portfolio, the company offers cottage-style properties under the Aspen Heights brand and higher-density properties with the Aspen Garden Style brand.

“We are excited about entering into this new partnership with Safanad,” Greg Henry, Aspen Heights CEO, said in a prepared statement. “We anticipate the cultural alignment between the two firms and our shared vision in the student housing sector to be key to our partnership’s growth and success.”

Ziad Dannaoui, head of Sanafad’s transaction team and a member of its real estate board, noted that student housing “offers attractive risk-adjusted returns and represents a fragmented market with significant opportunity to scale businesses.”

“We have developed an in-depth understanding of the key drivers underpinning student housing and this in turn informs our commitment to this sector,” he added in a prepared statement.

Referring to Safanad’s “proven investment and risk management across a number of specialized industry sectors,” he noted that Aspen Heights “management team and experience will further support our investments in this real estate sector.”

“We look forward to working with the Aspen Heights team in building out our student housing platform,” Dannaoui said in the statement.

Safanad, which has executed more than $5 billion global transactions since 2009, invests in real estate, private equity and public markets. The firm, with offices in New York, Dubai and London, has made some of its biggest commercial real estate deals in the healthcare sector. Last summer, Safanad partnered with Formation Capital, a healthcare-focused private investment company, to acquire a portfolio of 14 skilled nursing facilities in the mid-Atlantic for approximately $150 million. This summer, the two investment firms completed the acquisition of Extendicare’s U.S. business for $870 million. That transaction comprised over 160 senior care centers across 12 states, including ownership interests in most of the real estate. In March, 2014, the partners sold a $1.05 billion seniors housing and skilled nursing portfolio to NorthStar Realty Finance Corp. that was comprised of 43 seniors housing and 37 skilled nursing facilities in 14 states.