The Scion Group, a Chicago-based company that owns and operates student housing developments throughout the country—including the 158-unit University Edge complex just outside the North Gates of LSU—has acquired Dallas-based University Housing Communities, which made local headlines last fall when it paid a record-setting $108.6 million for the 287-unit The Standard, also near the North Gates, and renamed it University House Baton Rouge.
The deal between the two companies, which was finalized in mid-June, creates the largest privately held company in the country that both owns and operates apartment complexes in the rapidly growing university housing sector. What’s more, it gives The Scion Group more than 50 properties in 31 states and nearly 900 employees.
“It’s lot bigger than we ever thought it would be,” Eric Bronstein tells Daily Report of the company he co-founded 16 years ago with his brother, Robert.
Terms of the deal were not disclosed. But according to mortgage documents filed June 21 with the East Baton Rouge Parish Clerk of Court, The Scion Group, through an LLC, financed $672 million for the acquisition through Walker and Dunlop, a Fannie Mae lender. Bronstein says that amount does not represent the entire purchase price, but the amount that was financed through Walker and Dunlop.
With the acquisition, The Scion Group now owns three Louisiana properties: University Edge, University House Baton Rouge and University House Acadiana, which is near the University of Louisiana at Lafayette.
“We definitely have seen some benefits to scale,” Bronstein says. “But it also requires a lot more attention on our part.”
While the local university housing sector is increasingly competitive and, in Bronstein’s estimation, in danger of being overbuilt, he says he believes there is still plenty of opportunity for quality product in close proximity to LSU. He says the LSU market is not yet at a saturation point, and he believes the North Gates location of University Edge and University House is particularly advantageous.
“It’s a neighborhood that is definitely in transition, but it’s very eclectic and between the Water Campus and city government investment in the area we see potential,” he says. “Besides, the traffic near the South Gates is so bad, this area is perfect. It’s on the north side, away from the traffic, but walking distance from campus.”
—Stephanie Riegel
