Challenge: Developer FortGroup was looking to sell a five-property student housing portfolio, in which each property was owned by a different group of investors/partners and each had its own strengths and challenges:
- One of the largest properties was located in Gainesville, FL and was under construction during the marketing campaign, which coincided with lease-up season.
- The property located in Tampa, FL had a loan that had to be assumed by the buyer.
- The Athens, GA property was a hybrid in that a percentage of the units had already been sold as condos and some were rented to students.
- The Columbia, MO project was struggling through lease-up and the seller embarked on a massive marketing campaign that called for the addition of flat screen TVs in all the units.
- In San Marcos, TX, the asset was located more than two miles from campus.
Strategy: Colliers worked diligently with the seller, the construction team and the management team to monitor all aspects of timing on construction, certificates of occupancy and lease-up progress. We got in front of a potential re-trade so that both the buyer, LaSalle Investment Management, and the seller were in agreement on what the consequences would mean if critical dates and lease-up percentages were not achieved.
In order to “fast track” the loan assumption process, we worked with the lender weekly. Based on intimate knowledge of the condominium documents for the Athens asset, we calculated what the upside would be when the remaining available condo units sold, thereby providing additional income to the buyer. Although the seller was dedicated to the cost of adding flat screen TVs in the Columbia property units, the success of the campaign needed to be monitored daily. Our team scheduled bi-weekly calls with all ownership groups in order to provide information to all parties.
Result: All transactions closed successfully, with very little modifications to purchase price. A true-up period was defined for post-closing, and our team handled all the calculations and negotiations through that effort. Both buyer and seller were pleased with the outcome and this student housing portfolio remains one of the largest in the student housing industry in which brokers managed the transaction.