Greystar Nabs $722M Capital One Refi for Student Housing Portfolio [Updated]

The transaction refinanced over a dozen student housing properties and took out previous debt that funded Greystar's purchase of student housing provider Education Realty Trust.

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Capital One has funded a $721.8 million Fannie Mae facility to refinance a student housing portfolio controlled by a Greystar-led fund, Commercial Observer has learned.

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The financing—for Greystar’s Student Housing Growth & Income Fund, an affiliate of Greystar Real Estate Partners—comprises 10-,12- and 15-year tranches of debt and refinances a portfolio of 14 student housing properties as well as previous debt that facilitated Greystar’s purchase of leading student housing provider Education Realty Trust (EdR) last fall.

In September, Greystar, one of the industry’s largest global multifamily owners and operators, closed on its purchase of previously publicly-traded, Memphis, Tenn.-based EdR, a transaction that was valued at $4.6 billion.

EdR’s portfolio includes 84 “purpose-built” properties comprising 45,579 beds, targeting 50 universities across the country. The firm’s “deep bench of talent,” as Greystar Founder, Chairman and CEO, Bob Faith called it, retained its leadership team and headquarters in Memphis, while operating under a Greystar flag.

“Completing this highly strategic transaction provides us with an institutional-quality student housing platform at a scale that would be very difficult to replicate in the private market,” Faith said in a prepared statement in September 2018, following the deal’s close. “It also advances our long-term strategy to grow our global student housing footprint, and we look forward to leveraging our proven platform to enhance the company’s performance and value.”

Sources told CO that J.P. Morgan Chase, serving as the lead arranger on nearly $3 billion in debt for the Greystar fund’s acquisition facility of EdR, provided a one-year $1.6 billion bridge loan, with two, six-month extensions; a three-year, $300 million revolver; and a three-year, $325 million term loan, with two six-month extensions.

Capital One contributed $640 million to the deal, sources told CO. The bank provided a one-year $540 million bridge loan with two, six-month extensions; a three-year, $48 million revolver; and a three-year $52 million term loan, with two six-month extensions.

As part of the September purchase, a joint venture between affiliates of Blackstone Real Estate Income Trust and Greystar acquired a collection of 20 off-campus EdR communities for $1.2 billion, according to information from Greystar.

This story was updated to reflect J.P. Morgan Chase’s position as the lead bank in supplying debt for Greystar’s purchase of EdR.