Invesco Real Estate Income Trust Inc., a publicly registered non-traded real estate investment trust, has agreed to purchase a fully leased student housing property in Tempe, Arizona for $163 million, excluding closing costs.
At closing, the REIT plans to sell the underlying property to Safehold Inc. for $54 million and then enter into a 104-year ground lease with Safehold.
Tempe Student Housing is a Class A student housing property with 384 units, 833 beds and 414 parking spaces. The property is comprised of a 317,400-square-foot building situated on 2.1 acres located at 1000 East Apache Boulevard in Tempe, Arizona, one-tenth of a mile east of the Arizona State University campus and walking distance from Sun Devil Stadium, coffee shops, bookstores, restaurants and bars.
Among other amenities, Tempe Student Housing includes a rooftop deck with a pool, cabanas, and running track, ski and golf simulators, and a fitness center with on-demand fitness classes.
“With enrollment of over 52,000 students and a 12 percent increase in first year on-campus students in the 2021-2022 school year, we believe [Arizona State University] is likely to maintain a strong demand for walkable, off-campus housing as there are limited future on-campus housing projects planned and off-campus housing currently represents approximately 31 percent of full-time student enrollment,” the REIT said.
Tempe Student Housing was completed in late 2017 and was 100 percent leased for the 2020-2021 school year. The average lease term is 12 months from August to July with current average monthly rent of $1,018 per bed.
Invesco REIT expects to fund the acquisition through a combination of proceeds from its private offering of Class N common stock, $54 million in proceeds from the sale and ground lease with Safehold, and a $65.5 million purchase money mortgage from Wells Fargo.
The REIT plans to engage an affiliate of PeakMade Real Estate as the property manager.
Invesco Real Estate Income Trust invests in stabilized commercial real estate in the United States and intends to diversify globally. The REIT launched its public offering in late May 2021, which consists of up to $2.4 billion in shares of common stock and up to $600 million through the distribution reinvestment plan. It has raised $58.5 million in the primary offering, and as of November 30, 2021, had an aggregate NAV of $288 million.
Invesco REIT initially commenced operations in September 2020 via a $400 million private placement offering of Class N shares and sold nearly 6.3 million shares for approximately $164.3 million.