Arcapita exits US student housing investment

TDT | Manama  

The Daily Tribune – www.newsofbahrain.com

Arcapita Group Holdings, the global alternative investment firm, together with its partner Stamford, CT based investment manager Realco Capital Partners (“RCP”), announced today its exit from Quarry Trail, a student housing community serving the University of Tennessee, a tier 1 public university in the United States.

Quarry Trail was acquired by Nitya Capital LLC, a US-based real estate investment firm that owns and manages approximately $2 billion in real estate assets across the US. Arcapita’s student housing strategy, targeting public universities, has proven to be resilient despite the pandemic. During the hold period, Quarry Trail experienced both strong occupancy levels and rent growth driven by pent-up demand for an on-campus experience from both domestic and international students.

“We are very pleased with the performance of our student housing investment," Brian Hebb, Managing Director US Real Estate, said. "Tier 1 public universities in the US are seeing growing enrollment and housing needs, while institutional capital allocations toward the sector increase. We continue to view student housing favorably as a component of our US rental housing focus.”

Following the investment in January 2020, Arcapita and RCP executed on their business plan driven by comprehensive amenity and unit renovations and enhanced marketing initiatives that ensured occupancy was maintained near 100%, despite challenges posed by the pandemic.

Net operating income grew at a CAGR of 11.7% since acquisition, and the projected five-year IRR was achieved in a two-year period. Arcapita’s management team has completed over $15 billion in US real estate transactions over the past 25 years.

The firm’s US real estate investment strategy has predominantly focused on acquiring high-quality income-generating real estate assets in attractive locations that are supported by strong macroeconomic fundamentals.

Currently, Arcapita holds investments in various real estate segments, including in the rental housing and industrial sectors. Stamford, CT based Realco Capital Partners (RCP) is a student housing focused investment manager. 

Since 2009, RCP has bought and sold 2.7mm square feet of student housing at major universities in the US.