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11/12/12
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Education Realty Trust (EdR) has purchased The District on 5th Avenue, a new 208-unit, student housing community located approximately one-half mile from the University of Arizona in Tucson. The 764-bed complex sold for $67 mil, or $322.1k/unit and $268/sf.
Located at 550 North Fifth Ave, between North Herbert and North Arizona Avenues, The District on 5th Avenue is a high-end student community with 12 two-bedroom/two-bath units, four three-bedroom/two-bath units, 40 three-bedroom/three-bath units, 45 four-bedroom/two-bath units and 107 four-bedroom/four-bath units, with an average weighted unit size of approximately 1.2k sf. All units are leased by the bed.
Community amenities include a 24-hour fitness center, a swimming pool and spa, a parking garage, tanning beds, a volleyball court and a media room with a movie theater. Each unit includes a full kitchen with granite countertops and stainless steel appliances, nine-foot ceilings, and a washer and dryer.
A key attraction for tenants is the community’s central location and nearby transportation access. Residents can easily walk or bike the short distance to the University of Arizona; a light rail system will be opened in 2013 and pass within half a block of the clubhouse, serving both the university and downtown Tucson. The Congress Avenue shopping and entertainment district, also within one-half block of the community, features a wide range of retail shops and dozens of student-friendly restaurants, bars and clubs.
Peter Katz, an executive director with Institutional Property Advisors (IPA), advised the seller, Residential Housing. “The District on 5th Avenue is a core, Class A pedestrian-to-campus, purpose-built student housing community that ideally fits the institutional investor’s property profile of an urban infill, close-to-campus asset,” said Katz. “Institutional investors, in an effort to place allocated capital, have become more aggressive in their pricing. This has resulted in compressed cap rates and lowered unleveraged yields, especially for properties at tier-one universities with residents from strong socio-economic backgrounds.”
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