Chicago-based CA Ventures announced that QuadReal Property Group has acquired a 50 percent interest in its U.S. student living platform. The transaction formalizes the conversion of QuadReal’s existing student, entity-level investments with CA, to an ownership stake in the company.
QuadReal, headquartered in Vancouver, has committed $1.6 billion to the venture, including other CA investment vehicles strategically designed to support the continued growth of the firm’s student housing portfolio.
“This is a celebrated milestone for our student living business and the beginning of the exciting next chapter in our longstanding relationship with QuadReal,” said Tom Scott, chief executive officer at CA. “QuadReal has been a valued and trusted partner to CA since 2017 and has played an integral role in the strategic growth and transformation of our student living business. We are all incredibly proud of what we have accomplished to date and enthusiastic about the future opportunities we see for the business and the industry as a whole.”
The U.S. student housing industry, known in the real estate investment world for its recession-resilient qualities, has experienced incredible growth and maturation over the past decade. CA, a pioneer in the sector, has created a scalable, best-in-class development and operational model that has remained on a growth trajectory since its inception in 2004. During that time, CA has delivered more than 60 student housing communities totaling more than 35,000 beds in college communities across the country. Over the past few years, QuadReal has invested alongside CA to deliver 11,432 beds in 23 top-tier university markets.
“Student housing is an area of investment conviction for us based upon our research and our experience in the U.S. working with a dedicated team like CA,” said Jonathan Dubois-Phillips, QuadReal’s president of international real estate. “Even as this year is delivering unexpected dynamics to the landscape of higher education, students studying in the U.S. need safe and comfortable homes away from home, close to campus and their social and academic networks. CA has long understood the needs and expectations of students and their families. What CA offers is as relevant today as ever. We are pleased to be working together even more closely now with our investment in the operating company.”
This year, CA delivered nine student housing communities with nearly 4,000 beds, all of which were completed in time for the 2020-21 academic year despite the challenges posed by the pandemic. These assets feature signature CA design trademarks such as expansive indoor and outdoor amenity space, state-of-the-art integrated technology and high-end fixtures and finishes within each unit. CA’s design approach and in-house operational platform, complete with health and wellness services, has positioned the firm well to navigate the COVID-19 impacts on the student housing market over the past eight months. Since the start of the fall semester, CA has seen a measurable increase in year-over-year leasing activity as a result of the rapidly changing situation on university campuses.
“Today more than ever, we are seeing a flight to quality as investors and lenders look to partner with experienced operators that have made significant investments in the systems, technology and programming that really enhance the residential experience,” said Nishant Bakaya, chief investment officer at CA. “The resilience of demand in this space has been particularly evident during the pandemic. Our core, same-store portfolio has already pre-leased to 95 percent for the 2020-21 academic year and we are projecting positive leasing momentum through year end. We feel strongly that post-COVID student living will emerge as one of the best-performing real estate asset classes and we are thrilled to have QuadReal as our partner as we capitalize on these opportunities and build upon our highly successful track record.”