Institutional Property Advisors (IPA), a multi-family brokerage division of Marcus & Millichap, arranged the sale of The District on 5th Avenue, a new 208-unit, student housing community one-half mile from the University of Arizona campus in Tucson.
The 764-bed complex commanded a sales price of $67M, or $322,115 per unit and $268 PSF.
Peter Katz, an executive director, advised the seller, Residential Housing. The buyer was Education Realty Trust (EdR).
“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,” Katz said.
“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.”
Located at 550 N. Fifth Ave. between N. Herbert and N. 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 1,203 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.