Student housing developer and operator Core Spaces has formed a partnership with Goldman Sachs to recapitalize and develop a portfolio of nine properties valued at more than $600 million.
The assets consist of seven operating properties and two buildings under development, with a total of more than 4,300 beds catering to students at universities across the South, West and Midwest United States.
The Wall Street Journal reports that Goldman Sachs will likely utilize its newly launched $2.5 billion real estate investment fund for the Core student housing portfolio.
Core will keep a small ownership percentage in the portfolio and keep the assets under its management.
The operating properties that are part of the deal include three communities that opened in fall 2018: Hub Orlando (745 beds); Hub Tuscaloosa (486 beds); and State Tuscaloosa (174 beds).
The portfolio also includes four properties that opened for occupancy for the fall 2019 semester: Hub Tucson III (186 beds); Hub West Lafayette (608 beds); Hub Lexington Upper (492 beds); and Hub East Lansing (577 beds).
The two properties under development are situated near the University of Arizona campus: OLIV Tucson Main Gate (605 beds) and Hub Tucson Park Avenue (485 beds).
Goldman Sachs Group Inc.’s newly reorganized real estate investment unit is raising a $2.5 billion real estate fund structured similarly to the former Whitehall family of property funds, according to The Wall Street Journal, citing people familiar with the matter. The new real estate unit is part of a broader reorganization engineered by Goldman chief executive David Solomon, who took over last fall. Solomon wants the firm to focus more on making investments for third parties and generating fees.
The real estate business will be a prime testing ground for that strategy, said The Wall Street Journal article.
Under the new strategy, Goldman hopes to launch a series of real estate funds starting with the $2.5 billion fund that will look for property in the United States, Europe and Asia.
