Core Spaces, Schenk Realty and Kayne Anderson Realty have closed on a $233.3 million construction loan to finance Hub Knoxville, a three-building, mixed-use, nearly 2,000-bed student housing property in Knoxville, Tenn. The project will span more than 4 acres and be the largest student housing development in the city.
Construction began in the spring and the project is expected to deliver in phases in fall 2025 and 2026. Located along Cumberland Avenue near the University of Tennessee, Hub Knoxville will have three towers—two 10-story buildings and a seven-story building—with about 600 units and nearly 2,000 beds. Layouts will range from studios to five-bedroom units. The student housing property will include a resort-style rooftop pool deck with views of the university and downtown Knoxville. Other amenities include a courtyard with grilling stations, spa and fitness center, coffee shop and private study rooms.
The mixed-use development will host approximately 30,000 square feet of retail space and an 1,800-stall parking garage. Through a partnership with Covenant Health, the parking garage will also provide parking spaces dedicated to the Fort Sanders Regional Medical Center and East Tennessee Children’s Hospital. The project is expected to contribute to the transformation and revitalization of the city’s main downtown hub, known as “The Strip.” Hub Knoxville is expected to have a $700 million to $800 million economic impact during construction, including supporting more than 3,800 jobs.
Core Spaces and Schenk Realty, which both develop student housing communities across the United States, are the co-developers on the project. Juneau Construction Co. is the general contractor. Antunovich Associates is the design architect and Dwell Design Studio is the architect of record. Parini Design is the project’s interior designer.
Financing details
PNC Bank acted as the administrative agent and PNC Capital Markets acted as joint lead arranger on the financing. Truist was a joint lead arranger and syndication agent. TSB Capital Advisors acted as financial advisor to the developers. Webster Bank and Bank United also participated in the credit facility.
Andrew Wiedner, executive managing director and chief capital officer at Core Spaces, said in a prepared statement the Chicago-based firm had been considering a development in Knoxville for years and worked closely with the city to create a project that will provide additional student housing to the growing market and bring additional restaurants and retail to serve the community and UT students. Noting current market conditions presented unique challenges, Weidner said they were able to partner with Schenk Realty and continue a long-standing equity relationship with Kayne Anderson to bring the project to a group of lenders.
Kayne Anderson Real Estate, which manages $14 billion of real estate assets in equity and debt, is a private equity investor in off-campus student housing as well as multifamily housing, senior housing, self-storage and medical office.
Core Spaces’ expansion
Core Spaces, which also invests in build-to-rent single family homes, currently owns or manages more than 23,600 student housing beds and has a pipeline of more than 35,000 beds. In September 2022, Core Spaces unveiled plans for Hub Fullerton, a 1,047-bed student housing development in Fullerton, Calif., that will also include affordable workforce housing. Amplify Development is the company’s partner on the mixed-use project, which is slated for completion in 2025.
The company teamed up with Tom Winkopp Development in May 2022 to build a $200 million project adjacent to Clemson University in Clemson, S.C. The 140-acre walkable student housing village will have about 4,000 beds and be one of the largest privately owned, off-campus student housing developments in the U.S. Known as The Pier, it is slated for completion before the 2024-2025 academic year.
Also in May 2022, Core spaces formed a joint venture with Inland Private Capital Corp. targeting off-campus student housing opportunities at top-tier universities.