A Los Angeles, California-based real estate investment group has acquired four student housing complexes near LSU in a deal totaling nearly $128 million.
The sale was part of a larger transaction that closed Nov. 16, and involved a partnership between Saban Real Estate and Campus Advantage. Together, they acquired for $508 million from American Campus Communities a 12,083-bed portfolio of 19 student housing complexes in 11 university communities around the country.
The four LSU-area properties are among them. They include: Burbank Commons, 4600 Burbank Dr., which sold for $14.9 million; The Cottages of Baton Rouge, 777 Ben Hur Road, which sold for $64.6 million; U Club Cottages, 5689 Brightside Dr., which sold for $21.8 million; and University Crescent, 4500 Burbank Dr., which sold for $26.5 million.
Noteworthy among the local properties that changed hands is The Cottages of Baton Rouge, which at 382 units is one of the largest student housing complexes in Baton Rouge. Its sale price was $24 million less than the $89.5 million it sold for in 2012.
Local real estate appraiser Dave Lakvold says he’s not sure why the property sold for so much less than it did four years ago, but he says several factors could be behind the sell off in general.
“Interest rates are expected to go higher next month and if interest rates are higher than CAP rates go higher and that means values go down,” Lakvold says.
Decreased TOPS payments could also be a factor, he says. With higher tuition, LSU students and their families will have less money to spend on high-end student housing.
But Lakvold points out that the buyers are optimistic about this and the other markets they’re investing in and obviously see potential in the student housing sector. In a statement, Saban Real Estate’s chief investment officer Philip Han says, “We’re excited to partner with Campus Advantage … in the acquisition of a significant portfolio of well-located, institutional quality student housing properties.”
With this acquisition, Saban and Campus Advantage collectively own and/or operate a portfolio of over 35,000 beds across 40 universities, making them the fourth-largest owner/operator of off-campus, purpose-built student housing communities in the U.S.
—Stephanie Riegel
