American International Group’s AIG Investments provided a $75 million loan to a joint venture led by the development firm Kane Realty Corporation for a newly constructed 300-unit student housing facility in Raleigh, N.C., Commercial Observer can first report.
CBRE Capital Markets’ debt and structured finance team arranged the 20-year, fixed-rate, non-recourse loan on the property, Stanhope Student Apartments.
“The terms that we selected were basically a combination of a really great interest rate and a 20-year term,” Jennings Glenn, chief financial officer of Kane Realty, told CO. “Most of the other options we were looking at were 10-year, but we really wanted the 20-year. This is a long-term hold for us on the asset.”
Senior Vice President Mark Fisher and Associate Alex Furnary, of CBRE’s Manhattan office, worked with Senior Vice President David Meese and Associate Tom Kobus, of the firm’s Pittsburgh office, on the debt deal.
“AIG’s experience with student housing allowed it to assess Stanhope’s potential and value early on,” Mr. Fisher told CO in prepared remarks. “The student housing portion was fully leased 30 days after it opened in July. This is truly a state-of-the-art facility that redefines campus living.”
Stanhope, located at 3001 Hillsborough Street, opened to residents this summer. Kane Realty’s joint venture developed the five-story, 822-bed, mixed-use facility for North Carolina State University. The $72 million development took two years to complete.
The facility’s close proximity to three colleges, including North Carolina State University, the state’s largest public university, created a high demand for quality student housing, according to a spokeswoman for Kane Realty.
The student housing property management firm Asset Campus Housing marketed and leased the building, which was fully leased before it opened its doors, Mr. Glenn noted.
The newly constructed property contains a saltwater pool, two-story health club, art studio and ground-floor retail, among other amenities. The retail space is 67 percent leased and tenants include CVS, IHOP and Smoothie King, Kane Realty’s spokeswoman noted.
The residential units come fully furnished with private bathrooms and deck parking is also available for student tenants.
“CBRE did a great job bringing different options on the financing side to us, and ultimately AIG executed very well,” Mr. Glenn told CO. “In my 10 years of doing this with this company, it was one of the smoothest closings I’ve ever experienced.”
A representative for AIG declined to comment.