The joint venture partnership between GSA and a fund advised by Morgan Stanley Real Estate Investing closes four U.S. financing facilities
Global Student Accommodation (“GSA” or the “Company”), the global leader in student housing, announces that it has closed four financing facilities in the U.S. totaling in excess of $550m (the “Facilities”). The Facilities with Pacific Life Insurance Company, J.P. Morgan and TD Bank, PGIM Real Estate, and PNC Agency Finance, which provided access to Freddie Mac financing, were finalized in the fourth quarter of 2022. They cover over two thirds of GSA’s U.S. student housing portfolio, which is held in a joint venture (“JV”) partnership with a fund advised by Morgan Stanley Real Estate Investing (“MSREI”).
The Facilities are all with new lenders to GSA in the U.S., demonstrating the strength of the Company’s business model, relationships and underlying portfolio, providing GSA with an optimal financing structure to support its growth strategy. The financings are a combination of fixed and floating interest rates. TSB Capital Advisors acted as debt advisor for the transaction.
All assets covered are managed by the Company’s global operating partner Yugo. They serve leading universities including the University of Texas, the University of Arkansas, Mississippi State University, Florida State University, and the University of Washington.
Commenting on the Facilities, John Jacobs, Global Head of Capital Markets at GSA said:
“I am delighted to start 2023 having secured these financing facilities with new lending partners. The ability to close the transactions in the current economic climate is testament to the strength of the JV, reflecting its ability to develop new and deep relationships with lenders, and the stability of the underlying portfolio. This also highlights the robust characteristics of the student housing sector, with its ability to perform through cycles, as lenders continue to prioritize borrowers with high quality assets and a proven track record.
“The new Facilities will play a significant part in optimizing our U.S. capital structure, providing the security and flexibility to support our strategy to become a leader in US student housing.”
GSA first entered the U.S. in December 2020 and has quickly expanded its footprint to over 18,000 beds across 23 states and 32 cities. The JV’s strategy is to pursue measured growth, deploying capital through acquisitions in core markets, consolidating its presence in key cities such as Austin, Texas, while entering new target markets.
At the same time, the business is making significant investment in its existing U.S. portfolio, with a multi-million-dollar program of rehabilitation and improvement works underway and scheduled for completion this year. This includes the refurbishment of 2,500 beds, investment in clubhouse and amenity spaces and targeted ESG projects to improve the environmental performance of the portfolio, enhancing students’ experience and driving asset value.