New Student Housing Site for ASU Sold

From BREW by the Rose Law Firm

Tempe – A site for a $50+ million student housing project near Arizona State University in Tempe has been sold to a company formed by Blue Vista Capital Management in Chicago, Ill. (Peter Stelian, CEO). Blue Atlantic Tempe LLC (Blue Vista entity) paid $6.5 million ($42 PSF) to acquire the 3.56-acre site, which is just east of ASU at the northwest corner of Lemon Street and Terrace Road.

The seller was Oasis Indian Bend LLC, a company formed by IMH Financial Corp. in Scottsdale (Will Meris, pres.). In August 2013, IMH formed a joint venture with Titan Investments LLC in Denver, Colo. to develop a 220-unit/600-bed student housing complex on the parcel. IMH took over ownership of the site after foreclosing on the previous owner of the land and was looking for an equity partner to develop the project.

In stepped Blue Vista Capital Management, which acquired the land outright and will develop the property through a student housing investment fund it manages. Peak Campus Cos. in Atlanta, Ga., the affiliate of Blue Vista Capital Management, will now develop and manage the Tempe project. Titan Investments will no longer have an equity position in the development, but the company will serve as a consultant to the new owner.

Design plans from Ayers Saint Gross in Tempe are being tweaked a bit, but the development will stay pretty much as was approved by the City of Tempe. Plans still call for 600 beds, but there will be fewer total units at 214. The student housing complex will be comprised of three, five-story and two, six-story structures and a six-level parking garage with 400 spaces. There will also be 8,044 sq. ft. of ground level retail space. The one-, two-, three- and four-bedroom units will range from 607 sq. ft. to 1,628 sq. ft. The fully furnished units will be part of a resort-style development that will have a wide variety of amenities, including retail and restaurants, a theater, fitness club and game room. Monthly rental rates still to be determined.

No word on development cost, but the amount targeted by the IMH Financial/Titan venture was $55 million. Sources say the new developer will spend at least that much and is close to finalizing the construction loan. Construction is scheduled to begin this quarter with completion anticipated by July of 2015. Hardison Downey Construction Inc. in Phoenix to serve as contractor.

Peak Campus Development LLC will be the developer and Peak Campus Management LLC will manage the Tempe project. Peak Campus currently manages 29,000+ beds in 56 assets located across the U.S. that are valued at $1.8 billion. The student housing project in Tempe will be the first for Peak Campus in Arizona.

The Blue Vista affiliate is likely to hold the property for investment after construction and lease up. Blue Vista Capital Management manages Blue Vista Sponsor Equity Fund I, II, III and Blue Vista Student Housing. To date, Blue Vista Capital Management has participated in direct investments and joint ventures representing more than $5.25 billion in total capitalization.

The contact at Blue Vista is Brian Minnehan to learn more from him at (312) 324-6067. Dan Fitzpatrick is President of Peak Campus Development contact him at (404) 920-5300. Meris of IMH is at (480) 840-8400. Tony Patinella of Titan Investments is at (720) 528-7650.