HH Fund Receives $62M Loan to Acquire Student Housing Near Johns Hopkins
HH Fund, a student housing owner and operator, has received a $62 million stretch senior loan to acquire Nine East 33rd, a 157-unit off-campus student housing property located directly across the street from the main entrance of Johns Hopkins University in Baltimore.
The Silver Spring, Md.-based HH Fund purchased the property for $75 million from Armada Hoffler Properties. The publicly traded real estate investment trust is exiting the student housing space to fund other development and acquisition opportunities, with a focus on mixed-use, multifamily and grocery-anchored shopping centers instead, according to a third-quarter earnings call.
Berkadia arranged the stretch senior loan, which combines senior and subordinated debt in one package, from PIMCO. No terms were disclosed.
“The student housing sector has seen a strong resurgence of capital into this space, whether it be from lending or equity sources,” Aaron Moll, a director in Berkadia’s student housing division, told Commercial Observer. “We have been very pleased with the liquidity in the sector going into 2022.”
Originally built in 2016 and located at its namesake address, the 568-bed property features a fitness center, a resident lounge, an outdoor terrace and a parking garage. Nine East 33rd also is home to nine retail tenants, including anchor tenants CVS and Chase Bank.
The property is HH Fund’s fourth student housing community in Baltimore and 14th student housing facility overall.
“Student housing has demonstrated an ability to be a great performing asset class, especially at top schools, even through the pandemic,” Moll said. “The sector going into 2022 is seeing good national pre-leasing velocity in addition to strong in-place occupancy levels. Tier 1 schools remain the most sought after by capital, and we anticipate that trend holding for the next year or so.”
Cody Kirkpatrick, Noam Franklin, Chinmay Bhatt and Matthew Tu of Berkadia Joint Venture Equity & Structured Capital, joined Moll on arranging the loan from PIMCO.
Keith Loria can be reached at Kloria@commercialobserver.com.