MetroPointe Lofts has been taken back by Capmark. The 368-unit, 1214-bed student housing complex is located along West Marietta Street in Atlanta, Georgia. Developed in 2005, Capmark Finance provided a $75.8 million bridge loan on the property in July of 2006. According to a Capmark Finance press release on the deal at that time:
This was largest student housing transaction in the history of Capmark Finance to date. The primary challenge was the pre-stabilized occupancy level. Capmark Finance was able to structure a loan that included a debt service reserve for projected debt service shortfalls until the project stabilizes. The loan also included debt service performance criteria, and depending on whether the criteria are met, the interest rate will adjust.
We feel very secure in this investment due to the increasing enrollment of Georgia Tech, Georgia State University’s conversion from a commuter school to an urban living campus, and the Atlanta Art Institute’s master lease. The project, on which construction completed last September, will have an aggressive marketing campaign this school year. Students will also be able to inspect the spacious bedroom units with private baths during the pre-leasing season.
Recently, the National Real Estate Investor published an article titled “Student Housing: Recession Proof?“. This article did have some decent reasons why the NMHC thought this to be true, including shifting demographic trends (75 million echo boomers) and comparing student housing related rental rate growth relative to CPI increases (reportedly 7% median rental rate growth verses a 6.5% increase in CPI). These are a couple reasons why we expect there will be more than a few investors stepping up to bid on this asset, when the time comes.
REO Monitor: MetroPointe Lofts, Atlanta
Recently, the National Real Estate Investor published an article titled “Student Housing: Recession Proof?“. This article did have some decent reasons why the NMHC thought this to be true, including shifting demographic trends (75 million echo boomers) and comparing student housing related rental rate growth relative to CPI increases (reportedly 7% median rental rate growth verses a 6.5% increase in CPI). These are a couple reasons why we expect there will be more than a few investors stepping up to bid on this asset, when the time comes.