The multibillion-dollar partnership between Global Student Accommodation and a fund advised by Morgan Stanley Real Estate Investing has secured four financing facilities, totaling $550 million, for two-thirds of its U.S. student housing portfolio. Pacific Life Insurance Co., J.P. Morgan and TD Bank, PGIM Real Estate and PNC Agency Finance provided the Freddie Mac loans, with both fixed and floating interest rates.
Pacific Life Insurance Co. funded a combined $152.8 million loan for the 239-bed Yugo Austin Rio and the 796-bed Yugo Austin Waterloo, both adjacent to the University of Texas at Austin, Yardi Matrix data shows. PGIM Real Estate provided $108.5 million in financing for five assets, totaling 548 units and 1,619 beds in Austin, Texas, Flagstaff, Ariz., and Charleston, S.C. TSB Capital Advisors assisted the joint venture in the transactions.
GSA’s global operating partner Yugo is managing the assets, which serve students at several institutions, including the University of Texas, the University of Arkansas, Mississippi State University, Florida State University and the University of Washington.
Strong market fundamentals are fueling portfolio growth
The financing facilities provide security and flexibility for GSA to become a national leader in the student housing sector and will play a part in optimizing the firm’s U.S. capital structure, said the firm’s Global Head of Capital Markets John Jacobs, in a prepared statement. The transaction supports the strong characteristics of the sector which performs in cycles, as lenders prioritize companies with a strong track record and high-quality assets, he added.
After entering the U.S. market with an 8,000-bed acquisition, the company continued to grow its footprint, reaching 18,000 beds in 23 states. The joint venture targets assets in core markets and plans to consolidate its presence in key cities. A multimillion-dollar rehabilitation program is also scheduled for completion this year and includes the renovation of 2,500 beds and amenity spaces, as well as the implementation of ESG projects.
