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QuadReal acquires 50% of $4B CA Ventures student housing

QuadReal Property Group will expand its existing partnership to acquire a 50 per cent interest in...

IMAGE: Quadreal Property Group will invest $1.6B in the U.S. student housing portfolio of CA Ventures, a Chicago-based real estate developer and operator. (Courtesy Quadreal)

QuadReal Property Group will become a 50 per cent owner of the US$4B U.S. student housing portfolio of CA Ventures, a Chicago-based real estate developer and operator. (Courtesy QuadReal)

QuadReal Property Group will expand its existing partnership to acquire a 50 per cent interest in CA Ventures’ US$4-billion student living platform.

Chicago-based CA Ventures owns and operates 60 student housing properties, comprising more than 35,000 beds, in college communities across the United States. Over the past few years, QuadReal has also invested alongside CA to deliver 11,432 of those beds in 23 top-tier university markets.

QuadReal has about $1.6 billion
(all figures in US dollars) invested in the portfolio, according to a release Tuesday.

“Student housing is an area of investment conviction for us based upon our research and our experience in the U.S. working with a dedicated team like CA,” said Jonathan Dubois-Phillips, QuadReal’s president of international real estate, in the announcement. “Even as this year is delivering unexpected dynamics to the landscape of higher education, students studying in the U.S. need safe and comfortable homes away from home, close to campus and their social and academic networks.

“CA has long understood the needs and expectations of students and their families. What CA offers is as relevant today as ever. We are pleased to be working together even more closely now with our investment in the operating company.”

QuadReal, CA Ventures already partners

The transaction formalizes the conversion of QuadReal’s existing student, entity-level investments with CA, to an ownership stake in the company. The investment includes other CA investment vehicles which support continued growth of the student housing portfolio.

“This is a celebrated milestone for our student living business and the beginning of the exciting next chapter in our longstanding relationship with QuadReal,” said Tom Scott, chief executive officer at CA, in the release.

“QuadReal has been a valued and trusted partner to CA since 2017 and has played an integral role in the strategic growth and transformation of our student living business.”

The U.S. student housing industry has been considered at least partially recession-resistant due to its close ties to the post-secondary education sector. In the U.S., it has experienced significant growth and maturation over the past decade.

During the past year, CA delivered nine student housing communities with nearly 4,000 beds in time for the 2020-’21 academic year despite the challenges posed by the pandemic. The company was formed in 2004.

These assets all include what CA calls “signature design trademarks” such as expansive indoor and outdoor amenity space, state-of-the-art integrated technology and high-end fixtures and finishes in each unit.

CA says leasing remains strong

CA has an in-house operational platform, complete with health and wellness services, which it credits for helping it navigate pandemic-related challenges during 2020.

Since the start of the fall semester, CA has experienced an increase in year-over-year leasing activity as a result of the rapidly changing situation on university campuses.

“Today more than ever, we are seeing a flight to quality as investors and lenders look to partner with experienced operators that have made significant investments in the systems, technology and programming that really enhance the residential experience,” said Nishant Bakaya, chief investment officer at CA, in the release.

“The resilience of demand in this space has been particularly evident during the pandemic.

“Our core, same-store portfolio has already pre-leased to 95 per cent for the 2020-’21 academic year and we are projecting positive leasing momentum through year-end. We feel strongly that post-COVID student living will emerge as one of the best-performing real estate asset classes . . .”

CA and QuadReal plan to continue development and acquisitions for student housing communities near large, research-oriented university systems that offer best-in-class undergraduate and graduate programs.

About CA­ Ventures

CA Ventures is a global vertically integrated real estate investment management company with more than $13 billion in assets across the United States, Europe and Latin America.

It offers comprehensive in-house investment, development and operational services, and specializes in a range of niche, commercial real estate asset classes including student living, senior living, multifamily, industrial and medical office/life sciences.

CA manages real estate investments on behalf of some of the world’s largest institutional investors across a range of core, value-add and opportunistic investment vehicles. The firm also offers third-party management services for student, senior and residential assets.

About QuadReal

Headquartered in Vancouver, QuadReal Property Group is a global real estate investment, operating and development company.

QuadReal manages the real estate and mortgage programs of British Columbia Investment Management Corporation (BCI), one of Canada’s largest asset managers with a $171.3 billion portfolio.

QuadReal manages a $44.2 billion portfolio spanning 23 Global Cities across 17 countries.

EDITOR’S NOTE: This story was updated to correct financial information about the transaction. QuadReal had already made US$1.6B in investments in CA Ventures student housing properties; this transaction will result in an expanded partnership with QuadReal a 50 per cent owner of the US$4B portfolio.

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