The Scion Group CIO Avi Lewittes: Student Housing 'Is Ripe For Consolidation'
The Scion Group announced a mammoth $1B student housing portfolio acquisition from Harrison Street Real Estate Capital yesterday. The deal was made through Scion Student Communities, a joint venture between Scion Group, the Canada Pension Plan Investment Board and GIC, Singapore's sovereign wealth fund.
"We believe the sector is ripe for consolidation and will continue to grow our portfolio moving forward," Scion Group Chief Investment Officer Avi Lewittes said.
The deal added 13,666 beds to Scion Group's portfolio and is the fourth major transaction completed by the joint venture since its inception in 2016. Scion Group, CPPIB and GIC have deployed $4B in capital during that time. Lewittes said Scion Group's portfolio has grown from 14,000 beds to nearly 60,000 beds over the last four years as the firm actively seeks to acquire high-quality, purpose-built student housing portfolios in its target markets: top-tier public universities across the U.S. that represent a state’s flagship school, with a focus on STEM and tremendous value for the tuition.
The deal with Harrison Street consists of assets in 20 university campus markets, including properties at the University of Illinois Urbana-Champaign, University of Minnesota, University of Nebraska and University of Arkansas. The joint venture's portfolio now includes 73 student housing communities in 52 top-tier university markets.
Lewittes said Scion Group is focusing on acquiring multiple properties in these target markets, enabling the firm to offer diverse property types and rental price points while leveraging its property staff and marketing expenses within a given market. Commanding a greater share in a target market also allows Scion Group to steer referrals to other Scion-owned properties, rather than a competitor.
Lewittes said CPPIB and GIC are well-respected global real estate platforms with diversified portfolios. GIC was a pioneering institutional investor in the U.S. student housing sector in its early days as a product type.
"They recognized and appreciated the strong market fundamentals in our sector and continue to invest in student housing globally," Lewittes said.