Scion and Ares Funds Scoop Up Four Off-Campus Student Housing Assets for About $435 Million
Summary:
- The Scion Group and funds managed by Ares Management Corp. acquired four U.S. student housing communities for roughly $435 million.
- The portfolio includes 2,316 beds at sites close to the University of Georgia, the University of Tennessee, and Texas State University.
- Schenk+ sold the assets and developed three of the four communities, according to a statement on Tuesday.
The deal and what was bought
Scion and Ares-managed funds just notched the second purchase in their new partnership, securing four off-campus student housing properties for about $435 million. The package totals 2,316 beds near the University of Georgia, the University of Tennessee, and Texas State University. Schenk+ unloaded the portfolio and had developed three of the four properties.
Why student housing, and why now
Ares is doubling down on student housing, a corner of real estate widely viewed as durable in downturns because college enrollment tends to increase when the economy softens. That view has had company: institutional names such as Morgan Stanley and Brookfield Asset Management Ltd. have been positive on student housing in recent years.
What the partners plan next
In May, Ares and Scion - one of the nation's biggest holders of off-campus student housing - bought 12 communities for $910 million. According to the partners, they intend to continue pursuing comparable assets close to leading universities where enrollments are rising and where new supply is limited.
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The takeaway for your wallet
Big capital continues to focus on student housing, and Ares's latest move underscores that theme. For anyone tracking property types tied more to enrollment patterns than the broader business cycle, this remains a space seeing ongoing interest from large investors.
