Blue Vista Capital Management is targeting distressed student housing in the US after allocating $50 million of its joint venture fund, the Place/BV Student Housing Fund, to properties in or about to be foreclosed.
The $280 million fund, launched with Atlanta, Georgia-based developer Place Properties, last month acquired two properties near the University of Arkansas and the University of Nevada, Las Vegas (UNLV) in a deal worth $64 million.
Now though the firms are setting aside $50 million in equity – with leverage around $150 million – to purchase “pre-distressed, distressed and bank foreclosed” student accommodation. The fund will target over-leveraged owners who are about to, or have had, properties repossessed by banks, a spokesman for the fund told PERE.
Bob Clark, Place Properties executive vice president, said in a statement the economic climate and “pervasive economic downturn” were “forcing many property owners towards and even into bankruptcy.” With banks less willing to modify financing terms and work-outs, the fund said it believed it would be able to secure attractive discounts.
Blue Vista has more than $550 million in capital under management. Place Properties has developed more than $800 million of student housing properties since 1996 and currently manages more than 17,000 beds.
The Place/BV Student Housing Fund targets properties and development near universities with more than 5,000 students, which are leased “by-the-bed” and typically have a ratio of one bedroom to one bathroom.