JV Purchases 1,732-Bed Student Housing Development in Chicago for $201 Million

by Katie Sloan

Chicago — A joint venture between real estate investment firms AXA Investment Managers – Real Assets and Blue Vista Capital Management has purchased University Center Chicago, a 1,732-bed student housing complex located at 525 S. State St. in Chicago’s South Loop district.

Educational Advancement Fund (EAF) sold the asset to the joint venture for $201 million. University Center Chicago was jointly developed in 2004 by three major universities in Chicago – Columbia College Chicago, DePaul University and Roosevelt University. The 702,000-square-foot project features student housing, dining facilities, recreational areas, music practice rooms, conference center operations and ground-floor retail space. As part of the transaction, the three universities each negotiated a long-term lease with the new ownership to remain in the facility.

“The facility is an unusual facility in that its got a conference center, which was designed to serve educational purposes for all three schools,” says Peter Stelian, CEO and co-founder of Blue Vista Capital Management. “The facility is unlike something that you would find in most urban centers. On the amenity floors, the property features a large cafeteria, music recital rooms, recording studios, an urban garden, huge computer lab and a 24/7 convenience store where students can get food and sundry items. You’re not going to find those amenities in most major urban metros.”

The building offers floors with dormitory-style, suite units. These floors provide shared lounge spaces and kitchens. The other half of the building is very similar to a purpose-built student housing project with apartments ranging from one bedroom to four bedrooms with bed-to-bath parity.

John Jaeger, Dan Cohen and M.J. Zaring of CBRE represented EAF in the transaction in partnership with CBRE’s National Student Housing Team, headed by Jaclyn Fitts and William Vonderfecht. CBRE also partnered with Kevin Hoecker and Chris Good of RBC Capital Markets, as well as RBC’s Real Estate Investment Banking team.

Peter Marino and Molly Green of CBRE’s Chicago office partnered with the Dallas CBRE Capital Markets Debt & Structured Finance team of Mike Bryant, Jon Wooton and Ben Roelke to secure acquisition financing on behalf of the joint venture.

According to CBRE, this is the largest student housing sale in the Chicago area this year and one of the top three student housing transactions ever in the Chicago market. There’s plenty of student housing demand in Chicago’s South Loop as the district is home to 22 educational institutions, which boast an estimated enrollment of 58,000 students.

AXA Investment Managers – Real Assets is the real estate investment division of AXA Global, a global insurance firm based in Paris. As of June 30, the firm reported more than $83 billion worth of assets under management. The company employs 650 professionals in 15 offices worldwide and operates in more than 20 countries.

Blue Vista Capital Management is a student housing investment firm based in Chicago. Since 2003, Blue Vista has acquired and/or developed over $2.1 billion in student housing properties, representing 36,000 beds at 68 properties on 50 college campuses throughout the country.

— John Nelson and Katie Sloan

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