TPG Real Estate Partners (TREP), the real estate equity investment platform of global firm TPG, and Cardinal Group Cos. have closed on the acquisition of Preferred Apartment Communities’ student housing portfolio for a purchase price of approximately $479 million.
This marks the first investment by TREP and Cardinal Group as part of a joint venture to source and acquire high-quality student housing portfolios. The acquired portfolio consists of eight student housing communities with more than 6,000 beds.
The portfolio includes Class A assets with an average vintage of 2015 located at Division I universities with Power Five athletic programs and an average enrollment of 44,731 students, including three of the eight largest universities in the nation, according to the partners. The eight properties are located at Arizona State University in Tempe; Baylor University in Waco, Texas; Florida State University in Tallahassee; Kennesaw State University in Kennesaw, Georgia; Texas A&M University in College Station; Texas Tech University in Lubbock; University of Central Florida in Orlando; and University of North Carolina in Charlotte.
“We are excited to be partnering with Cardinal Group on our initial entry into the U.S. student housing sector,” said Ty Newell, principal at TREP. “We believe the assets in this portfolio will benefit from their adjacency to high-quality academic institutions that are well positioned to weather the challenges resulting from the COVID-19 pandemic. We look forward to leveraging TREP’s expertise in building and scaling high-quality real estate platforms, as well as the best-in-class operating capabilities of our partners at Cardinal Group, to generate additional growth and value across the portfolio.”
The joint venture plans to invest more than $11 million of capital to upgrade several of the communities, including improvements to interiors and amenity spaces.
“This acquisition is a great opportunity for Cardinal Group to demonstrate our capabilities as a fully integrated owner and operator of student housing nationally. This is the highest-quality portfolio we have seen in several years and includes an ideal mix of stable cash flow and value-add upside,” said Greg Martini, vice president of acquisitions. “These assets pair well within our existing portfolio and advance our strategy of focusing on high-quality value options at major universities.”
Cardinal Group, based in Denver, is a fully integrated real estate firm focused on multifamily. Prior to the acquisition, the firm had 57,602 beds, making it one of the top privately held student housing owners and operators.
The acquired portfolio will be managed by Cardinal Group Management. In addition, Cardinal Group Construction will provide value-add construction services, and Agency Fifty3 will provide marketing and branding services.
CBRE advised TREP and Cardinal Group on the transaction.
