Over $6 Million Equity Raise for 85-Unit, 208-Bed Student Housing Development in Memphis, TN

Cumulative Preferred Return: 9.00%
Waterfall: Confidential
Hold: Expected 5 to 10 years with at least one refinance

Transaction Description:

George Smith Partners was retained to source the equity required to build a 208-bed student housing project in a secondary market in Memphis, Tennessee. GSP faced many challenges in sourcing the equity needed for this project. During the COVID-19 pandemic, many colleges and universities changed from in person classes to online classes. Students had no reason to reside near or on campus except to be away from parents and near friends. There is increased demand for off campus housing because the universities are de-densifying the dorms. In addition, while this University was showing a growth in student population, it was not a “power” school with a large football program. These risks were mitigated by having a limited new student housing supply over the past two years, a best in class sponsor and a robust return on cost even with rents discounted due to COVID that could absorb short term shocks. The Investor and Sponsor also believe that this Project will open after a vaccine is found and perform as outlined in the proforma.

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