Morgan Stanley Secures $170M for Ole Miss Student Housing Acquisition

Morgan Stanley Real Estate Investing (MSREI) and The Scion Group have secured $170.3 million in financing for their acquisition of a student housing portfolio near the University of Mississippi, Commercial Observer has learned.

The joint venture is acquiring the portfolio in Oxford, Miss. — which is within two miles of the Ole Miss campus and comprises 600 apartments, townhouses and cottages with more than 2,000 beds — for a combined investment of $262 million, according to a Tuesday announcement.

J.P. Morgan and BMO provided the $170.3 million in senior financing for the transaction, according to a source with knowledge of the deal. TSB Capital Advisors represented the JV in arranging the financing.

“We are pleased to acquire this high-quality portfolio of student housing communities at the University of Mississippi offering a variety of product types and price points,” Will Milam, head of U.S. investments at Morgan Stanley, said in a statement.

“The dramatic supply-demand dynamics in the region have led to notable financial performance for these assets, which we expect to continue as the university continues to experience strong enrollment,” Milam added.

J.P. Morgan and BMO declined to comment, while a spokesperson for TSB did not immediately respond to a request for comment.

The JV’s acquisition of College Town Oxford, a cottage-style community on the west side of the Ole Miss campus, closed earlier this month, according to the announcement.

The remaining acquisitions, which are set to close in the third quarter of this year, include a garden-style community on the south side of campus and four smaller properties in Downtown Oxford, the announcement said.

“We are excited to enter this new joint venture with MSREI and appreciate their confidence in Scion,” Scion CEO Rob Bronstein said in a statement. “We share confidence in the ongoing attractiveness of the Ole Miss campus market, in which Scion continues to invest with this latest acquisition.”

Scion has a current portfolio of more than 94,000 beds of student housing in 144 communities and serves 82 college and university markets across 35 U.S. states, according to the announcement.

Scion’s latest venture with MSREI comes after it purchased a student housing portfolio from Harrison Street with an undisclosed buyer for $893 million in November, as Commercial Observer previously reported.

Scion acquired 14 student housing assets near 13 different universities — including the University of Arkansas, Texas A&M University and the University of Missouri — as part of that deal, CO reported.

Meanwhile, investment funds managed by MSREI currently own 43 student housing properties in the U.S. totaling 17,700 beds, the announcement said.

Isabelle Durso can be reached at idurso@commercialobserver.com.