Scion, Virtus Buy $118M Student-Housing Portfolio from ACC

A joint venture between affiliates of The Scion Group and Virtus Real Estate Capital has acquired, from American Campus Communities, a portfolio of three student-housing properties for $118 million.
Virtus

University Pines, serving Georgia Southern University

A joint venture between affiliates of The Scion Group, Chicago, and Virtus Real Estate Capital, of Austin, Texas, has acquired, from American Campus Communities, a portfolio of three student-housing properties for $118 million, it was announced late last week.

The three properties, which total 2,360 beds in 628 apartment units in 58 buildings, are The Village at Blacksburg, a 1,056-bed community serving Virginia Tech; State College Park, a 752-bed property serving Penn State University; and University Pines, a 552-bed community serving Georgia Southern University.

The closing took place July 11, according to Scion Group president Robert Bronstein. Scion will manage the venture and the properties, into which the JV plans to invest more than $6 million in upgrades. Joint ventures of Scion and Virtus now own eight student-housing communities.

The portfolio was acquired with mortgage financing from Fannie Mae issued by M&T Realty Capital Corp. and arranged by the Indianapolis office of Holliday Fenoglio Fowler L.L.P.

The Village at Blacksburg, about three-quarters of a mile from the Virginia Tech campus in Blacksburg, Va., consists of two- and four-bedroom apartments in 26 buildings. Scion and Virtus plan significant upgrades to interiors, grounds and amenities.

The 19-building State College Park, about three-quarters of a mile from the Penn State campus in State College, Pa., comprises two- and four-bedroom apartments and according to Scion and Virtus is the closest to campus of the many large, purpose-built garden-style communities serving the university. Here, too, Scion and Virtus plan significant upgrades to interiors, amenities and grounds.

University Pines consists of 13 buildings and is across the street from Georgia Southern University in Statesboro, Ga., and also adjacent to a 564-bed property already owned by a Scion-Virtus JV, Cambridge @ Southern. The two communities will be managed together under the latter name.

The purchases of the Virginia Tech and Penn State properties, Bronstein told Commercial Property Executive, were driven primarily by the quality of the schools themselves and by geographic diversification, since Scion had not previously had a presence in those two states.

In the case of the Georgia Southern community, Bronstein said, the adjacent property already owned by a Scion-Virtus JV made it a choice target. In addition to the usual economies of scale, co-branding and managing the two communities will provide more floor plans/unit types (seven vs. four) to offer students, he added.

In addition, Bronstein concluded, both of the swimming pools, one at each property, will be rehabbed, with one positioned as the more active one and the other intended to be a quieter setting.