Preferred Apartment Communities to sell student housing portfolio to TREP

US-based real estate investment trust Preferred Apartment Communities has agreed to sell its student housing portfolio to TPG Real Estate Partners (TREP) for $478.7 million.

The portfolio being divested comprises eight student housing communities located across Arizona, Florida, Georgia, Texas, and North Carolina. Put together, the communities have over 6,000 beds with a wide variety of indoor and outdoor amenities.

Joel Murphy – Preferred Apartment Communities President and CEO said: “We look forward to closing the sale of our student housing portfolio to TPG Real Estate in the coming months.

“This is consistent with our previously stated objectives to exit the student housing space, simplify our focus to our core Sunbelt multifamily business, and improve our balance sheet. TPG Real Estate has demonstrated their commitment to the transaction and their sector experience throughout the process, and both groups worked well together during the due diligence phase.”

Preferred Apartment Communities to sell student housing portfolio to TREP. Image courtesy of PRNewsFoto/Preferred Apartment Communities.

The housing communities that are part of the deal are NxNW in Tallahassee, Knightshade in Orlando, The Tradition in College Station, The Bloc in Lubbock, Ursa in Waco, SoL in Tempe, Stadium Village in Kennesaw, and Rush in Charlotte.

Ty Newell – Principal at TPG Real Estate Partners said: “This transaction represents a scaled entry for TPG Real Estate into the U.S. student housing sector and an extension of our student housing initiatives in Europe. We believe the assets in this portfolio will benefit from their adjacency to high-quality academic institutions that are well positioned to weather the challenges resulting from the Covid-19 pandemic.

“In spite of these near-term challenges, these student housing communities are poised to experience a combination of strong regional demographic fundamentals and favorable supply dynamics that should continue to support performance. Preferred Apartment Communities has continued to operate and lease the Portfolio in a first-rate manner following the signing of the purchase agreement.”

The deal, which is subject to customary closing conditions, is expected to be wrapped up in Q4 2020.