Scion Group Makes $175M Student Housing Grab

The Scion Group is one of the most active acquirers of student housing over the last several years. The Chicago-based compant just purchased a $175M portfolio from American Campus Communities, adding more than 5,000 student housing beds to its ranks.

Scion’s portfolio now comprises nearly 24k beds. CIO Avi Lewittes tells us the 5,096-bed portfolio includes properties serving James Madison University, the University of Florida, the University of Georgia and the University of Tennessee. Scion completed the transaction in a JV with a private investment firm. Avi gave several reasons why now is a good time to buy:

1) The significant volume of recently developed properties that need to find permanent homes among the proven major operators.

2) An increased appetite within the institutional investor community for exposure and participation in the secto.

3) A favorable capital markets environment.

Scion likes to spend top tier public university markets. Closing on this large, off-market, multi-property transaction was an attractive opportunity to leverage both Scion’s physical and operational repositioning expertise, as the firm undergoes a major rehab program across these properties to the tune of $16M. He also tells us the two University of Georgia student housing communities (pictured and rebranded as The Park at Athens) will enhance Scion’s existing presence in that market, where the firm is the largest owner of off-campus, purpose-built student housing.

Among the assets acquired is West 20 (pictured), a 1,044-bed community in Gainesville. U. of F has 50,000 students, making it the nation's eighth largest single-campus university. Formerly called The Estates, the property is situated less than a mile from the center of campus and adjacent to several other student housing communities. The deal also includes three communities in Harrisonburg, Virginia, serving JMU (enrollment: 21,000). The properties have been rebranded as The Hills of Harrisonburg. In Knoxville, the former University Heights will be rebranded as The Heights of Knoxville, serving students at Tennessee (enrollment: 27,000).