Bahrain’s Arcapita exits US student housing portfolio

Arcapita Group Holdings, the Bahrain-headquartered alternative investment company, has exited from its student housing community investment in the United States.

Arcapita sold its student housing community near Clemson University, the second largest university in South Carolina, to Chicago-based Core Spaces, an operator of student housing properties. 

The transaction is Arcapita’s second student housing exit in 18 months with the total deal value across both transactions valued at more than $175 million.

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Arcapita’s student housing strategy has performed well, despite the pandemic and global economic volatility.

Over the three-year holding period, the portfolio’s occupancy level and rent collection rate were nearly 100 percent. As a result, net operating income grew at a compound annual growth rate of 9.4 percent since the acquisition.

Brian Hebb, managing director and head of US real estate, said: “Despite recent challenges, the US real estate market continues to demonstrate favourable investment conditions, especially on the back of an improving macro environment in the world’s largest economy.”

The company continues to view student housing as a key component of its US rental housing focus, Ahmed Al Shirawi, managing director and deputy head of investors relationship management, added.

In May 2022, Arcapita exited from Quarry Trail, a student housing community serving the University of Tennessee, a tier 1 public university. 

The property was acquired by Nitya Capital, a US-based real estate investment company that owns and manages $2 billion in real estate assets.