Austin-based student housing owner-operator Campus Advantage paid $40.89 million through an affiliate on Friday for The Edge apartments across the street from UCF, and will seek a general contractor to lead significant renovation work across the property, the company's senior vice president of investments told GrowthSpotter on Monday.
Located northwest of the intersection of N. Alafaya Trail and Research Parkway, the property lies directly west of UCF and along its shuttle bus route. The Edge includes 21 three-story buildings built in 1999, with 312 units and 930 beds.
"We do plan significant capital investments, with unit renovations to include counter tops, cabinetry, appliances and flooring. There's also some large deferred capital items like roof work, painting of the buildings, the parking lot, and some older HVAC systems require an update, so we'll be spending a large amount of capital to improve energy efficiency," said Michael Orsak, who declined to forecast a total investment budget.
The company will likely require the next two to three weeks to align its personnel for The Edge and transition reporting to the corporate office. Renovation work could start on the property by June 1, and competitive bids will be sought in advance from local contractors, through its Austin office, Orsak said.
Set on 21.72 acres across two parcels, the property was sold by Pegasus Connection Associates LLC, an affiliate of Austin-based American Campus Communities, which had previously bought it in October 2005 for $48.5 million.
Campus Advantage sourced a $25.5 million mortgage to help finance the acquisition from the real estate investment division of Nationwide Life Insurance Company, out of Ohio.
Founded in 2003, Campus Advantage offers student housing management, development, acquisition and consulting services. The company entered the Orlando market in 2013 with the purchase of the 194-unit Northgate Lakes apartments near UCF.
The Edge acquisition is the first for Campus Advantage under a second round of funding received from a major state pension fund. The company plans to expand its portfolio nationwide, but the Orlando student housing market is one where it will stop at two assets, based on diversification needs for the investment portfolio of its pension fund partners, Orsak said.
On-site amenities include a 24-hour fitness center and recreation center with billiards, foosball and ping pong, swimming pool with hot tub and sundeck, barbecue grills, movie theatre room, tennis court, sand volleyball court, basketball courts and study rooms. Apartment units feature private bedrooms, leather-style furniture, washer/dryer and fully-equipped kitchens.