S3 Capital Lends $116M for Texas State Student Housing

Elevate Development Partners has secured $116 million of acquisition and construction financing to build a student housing complex serving Texas State University, Commercial Observer has learned

S3 Capital supplied the loan for Elevate Development’s 260-unit McLain project in San Marcos, Texas, steps from the Texas State campus. The deal marks an expansion of S3’s lending platform beyond its niche of traditional multifamily.

“Capitalizing on supply-demand imbalances has always been our focus, and we see student housing as a natural expansion of that same approach,” Steven Jemal, managing director of origination at S3 Capital, said in a statement. “Demand is structurally captive, and many universities are growing enrollment faster than they can add beds.”

Jemal said Texas State has large-scale demand for off-campus housing with enrollment up 9.6 percent in fall 2025 to a school record 44,596 students. He noted that the university is poised for further growth with a new  $137 million STEM facility scheduled for completion in December and a $42 million renovation of the football stadium’s south end zone.

Located at 410 North Street, the 759-bed development will be directly adjacent to campus, near the Ingram School of Engineering and McCoy College of Business. Community amenities will include study lounges, a social lounge, a bicycle room, a mail room, a swimming pool, a yoga room, a fitness center and conference rooms. 

Joshua Crane, co-founder and principal of S3 Capital, said in a statement that the deal was attractive due to San Marcos having “strong demographic tailwinds,” Elevate Development Partner’s previous experience in the market, and a lack of supply of student housing. San Marcos is in a rural area midway between Austin and San Antonio, about 30 miles from each city.

The seller and purchase price information were not immediately available. 

“We are incredibly excited about the long-term growth story surrounding Texas State University and the opportunity to develop a truly best-in-class project at the footsteps of campus,” Chris Skyles, founder of Elevate Development Partners, said in a statement. “Texas State is one of the most exciting growth stories among large universities in the country right now.”

Walker & Dunlop negotiated the financing with a  capital markets institutional advisory team led by Sean Reimer, Aaron Appel, Keith Kurland, Jonathan Schwartz, Adam Schwartz and Dustin Stolly. 

“We continue to see significant investor and lender interest in student housing, particularly in markets where enrollment growth is outpacing new supply,”Reimer, senior managing director at W&D, said in a statement., 

Andrew Coen can be reached at acoen@commercialobserver.com.