Last Updated: January 4, 2016 12:08pm ET
By Paul Bubny
OAK BROOK, IL—InvenTrust Properties Corp. is selling off its student housing platform in order to become a pure-play multi-tenant retail REIT. Known as University House Community Group Inc., the platform is trading to a partnership of Canada Pension Plan Investment Board, GIC Pte. Ltd. and the Scion Group LLC in a deal valued at approximately $1.4 billion.
“The sale of University House marks the culmination of our portfolio evolution strategy to focus our energies and investment capital into our multi-tenant retail platform,” says InvenTrust’s CEO and president, Thomas McGuinness. “While University House has been a valuable component of InvenTrust’s portfolio, we are very excited about this transaction, which represents the conclusion of a robust evaluation process to maximize the value we receive for the platform.”
UHC’s portfolio includes 18 stabilized student housing communities and four in development, all in close proximity to their respective university campuses and comprising nearly 13,000 beds. The portfolio is concentrated among top-ranked US universities with large student enrollment populations. Scion will manage and operate the portfolio, and will own 5% of UHC, with CPPIB and GIC each owning 47.5%.
While the deal represents an exit for Oak Brook, IL-based InvenTrust, for CPPIB and GIC it represents a point of entry into the US student housing market. At CPPIB, Peter Ballon, managing director and head of real estate investments Americas, says the UHC deal “enables us to gain immediate scale in the attractive U.S. student housing market. We look forward to working with GIC, an existing partner, and Scion, an experienced operator, on the UHC portfolio as well as future student housing investment opportunities in the US.” The partnership intends to focus on Tier 1 university markets.
Under the terms of the purchase agreement, the final net proceeds of the sale will be determined at the closing of the transaction, which is expected to occur in midyear. InvenTrust says it intends to explore all options regarding the use of the net proceeds from the UHC transaction.