Scion Group Agrees To Acquire $1.5B Student Housing Operator
The Scion Group's student housing portfolio is getting even larger, with the firm announcing that it has agreed to buy Student Quarters' (SQ) operating business.
The purchase price was not disclosed, but SQ holds roughly $1.5 billion in student assets under management. Already, before the deal, Scion said it was the world's largest operator of off-campus student housing. Now, its portfolio expands to almost 118,000 bedrooms across 190 communities and 94 top universities, pending the sale's completion. Scion is using its balance sheet to fund the transaction.
Scion said that the acquisition gives it more of a presence near high-quality colleges. The Chicago-based firm plans to leverage its technology infrastructure, centralization capabilities and experience to drive expected margin improvement and NOI growth in SQ's portfolio.
"This acquisition is at the center of a historic period of growth and investment for Scion, with aggregate capital deployment activity exceeding $5.0 billion over the last two years," said Robert Bronstein, CEO of Scion, in a statement.
"Student Quarters represents a compelling opportunity to extend our platform with a high-quality operating business while partnering with an experienced team that we're excited to work with."
One of Scion's other major student housing acquisitions included paying $893 million for a 14-property portfolio that was owned by Harrison Street.
In addition, Scion plans to stay active and plans to invest in both "underlying real estate" and related structured funds. Also, it added that it expects the SQ deal to be just the "first of several potential opportunities to expand its platform."
SQ's senior leadership will keep ownership stakes in the portfolio.
Scion anticipates that the deal will close next quarter, pending customary conditions.
In April, student housing pre-leasing was strong, with 68.2% of beds nationwide locked in for the upcoming academic year. This is above the decade average of 66.6% that's normally seen at this point in the leasing season.
Source: GlobeSt/ALM