Boston – CBRE has announced the sale of a 150-unit next-generation student housing community serving the University of Massachusetts Amherst (UMass Amherst), the largest university by enrollment in New England.
Athens, Georgia-based Landmark Properties has purchased North 116 Flats from Dallas-based Fountain Residential Partners for an undisclosed price.Jaclyn Fitts, William Vonderfecht and Casey Schaefer of CBRE’s National Student Housing Team and Biria St. John and Simon Butler of CBRE’s New England Multifamily Investment Sales Team arranged the transaction on behalf of the seller. .
North 116 Flats is located north of UMass Amherst at 653 Amherst Road and is the largest purpose-built student housing complex on the market. Built in 2020, the luxury community offers an expansive outdoor recreation lawn with hammocks, a spacious community lounge with private study rooms, and a state-of-the-art fitness and yoga studio. The Pioneer Valley Transit Authority (PVTA) bus line stops on site and connects directly to the UMass Amherst campus. Each student unit is fully furnished and includes designer lighting, granite countertops, private patios, 55-inch smart TVs, wood floors, and stainless steel appliances.
The UMass Amherst submarket is a proven and extremely high barrier market for new developments. Very few developments have been approved in recent history; Fountain Residential Partners underwent an approximately fifteen-year eligibility process with the development of North 116 Flats. As part of the eligibility process, North 116 Flats was licensed under a Chapter 40B offset permit, with 25% of the units meeting the requirements for affordable housing in perpetuity.
Under the 40B Comp permit, ongoing funding was to be provided by MassHousing, creating additional complexity to the inherently unique offering. Additionally, due to a lack of local infrastructure, Fountain Residential built an on-site wastewater treatment facility that had to be certified by the Massachusetts Department of Environmental Protection, adding another level of complexity. Development.
“North 116 Flats is a rare offering because very few purpose-built student housing assets have traded in the state historically,” said Mr. Schaefer, senior vice president of CBRE. “MassHousing’s financing requirement for the asset added a layer of complexity to the transaction. Yet the overwhelmingly compelling market supply and demand fundamentals and asset quality have generated considerable investor interest.
The building achieved over 95% occupancy in its first two years of operation. UMass Amherst also continues to attract growing numbers of students, enrolling 32,045 students in fall 2021 according to the university’s common dataset. This represents enrollment growth of 13.5% over the past decade. Given the limited supply currently available and expected in the market, combined with UMass Amhert’s listing trajectory, North 116 Flats is well positioned to continue its strong performance.
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