National Student Housing Groups Posture For UA Students’ Business

CPP Star Pass, LLC an affiliate of Columbus Pacific Properties, Inc. (Brian Shirkin and Rick Margolis, partners) of Santa Monica, CA bought The Reserve at Star Pass from EDR Tucson Phase II, LP a subsidiary of Education Realty Trust, (NYSE:EDR) a real estate investment trust based in Memphis, TN for $26 million ($25,500 per bed). The 1,020-beds in 336 units, was built in 2000, to be a resort-style student apartment complex on 21.46 acres. The property was running at 65% occupancy when it sold.

CPP rebranded the property shortly thereafter to The Ranch at Star Pass, and intends to invest in new transportation shuttles to transport students the 5.6 miles to the UA as well as upgrade the on-site programming for residents. CPP is expanding into the student housing market via Class-B properties within driving or walking distance of major universities, where investments and capital improvements will increase demand.

In September 2012, Columbus Pacific Properties, Inc. under the name of CPP Tucson, LLC purchased NorthPointe Apartments at 850 E Wetmore Road, Tucson, for $29.75 million ($32,600 per bed) also from EDR. This 300-unit student property with 912-beds was 95% occupied at time of sale. CPP now claims 5,545 beds in its portfolio and is looking to become a top owner in the student housing market.

CPP engages in real estate investment, development, and lending businesses. It develops and redevelops shopping centers and residential properties in California, Arizona, New Mexico, Texas, Indiana, Nevada, Georgia, Kentucky, and Ohio. The company was founded in 1995. Since 1995, CPP has purchased and redeveloped over 5 million square feet of retail and 3,100 multi-family units and has provided over $200 million in mezzanine and equity capital, funding projects with an underlying value in excess of $1.4 billion.

The seller, EDR, exchanged NorthPointe and The Reserve for The District on 5th Street, a Class-A, LEED Silver student community, for the approximate price of $67 million ($87,000 per bed) for 764-beds and 208-units in two-, three- and four-bedroom floor plan configurations that opened September, 2012. The property is located at 550 N 5th Avenue, within walking distance to University of Arizona, built in 2012 with resort-style amenities. The District was 99% leased, with an average lease rate of $633 per bed when it closed, and sold at a 6.3% cap rate based on income for 2012-2013 academic year.

EDR is a self-administered and self-managed real estate investment trust, or REIT, with a large national footprint; it currently owns and manages 34 on- or off-campus communities with more than 25,400 beds in 23 states, and provides third-party management services for another 20 properties with more than 10,000 beds. Since 2000, the Company has developed more than 33 privatized housing communities and completed more than $2.4 billion in collegiate housing transactions both on- and off-campus. Of these transactions, EDR invested more than $1.3 billion in private equity and ranks second only to American Campus Communities in number of beds owned by student housing owners.

For more information, contact Rick Margolis of EDR at (901) 259-2500. CPP can be reached at (310) 395-2580. The Ranch at Star Pass is at (520) 624-3972 and The District on 5th is at (520) 918-6466. Contact NorthPointe Apartments at (520) 888-3838.