Strategic Student & Senior Housing Trust Executes Higher Value Sale of Arkansas Property
Strategic Student & Senior Housing Trust Inc. – a publicly registered, non-traded real estate investment trust – has again executed an agreement to sell its final student housing property, The District, a 198-unit student housing asset adjacent to the University of Arkansas in Fayetteville for $72.25 million. The sale is anticipated to close in the third quarter of 2024.
The acquirer is a joint venture between an affiliate of Virtus Real Estate LLC, which will own 95% of the JV, and an affiliate of Strategic Asset Management I, LLC, the sponsor of Strategic Student & Senior Housing Trust. It is expected that the affiliate of Strategic Asset Management I, or SAM, will serve as the manager of the joint venture, and the property manager of the Fayetteville property on behalf of the joint venture.
SAM, formerly known as SmartStop Asset Management, rebranded in June 2022.
As reported by The DI Wire, the REIT acquired the property for approximately $57 million in June 2017, excluding acquisition costs. Also as reported in December 2023, the REIT entered into a purchase and sale agreement of the Fayetteville property with a different purchaser, Walton Street Capital LLC. Walton ultimately passed on the sale transaction and the deal was terminated in January 2024.
In a letter to stockholders, the company touted the improved operating performance of the Fayetteville property as reason it was able to achieve a $72.25 million sale price versus the $63 million sale price in Q4 2023 with Walton, an increase of 14%.
As part of the new sales agreement, Virtus made an earnest money deposit of $750,000.
The REIT anticipates that the net proceeds from the sale of the Fayetteville property will be primarily used to repay two loans, the mortgage loan encumbering the Fayetteville property, approximately $34.5 million, and the KeyBank Bridge Loan, which is approximately $25.5 million. The remainder of the net proceeds will be used for other corporate purposes, including but not limited to reimbursement of fees and expenses owed to the adviser of the REIT, a subsidiary of SAM, and distributions to stockholders.
As of March 31, 2024, the REIT owned one student housing property and four senior housing properties. In January 2024, its board of directors approved an estimated net asset value per share of $6.34 for its Class A, Class T, Class W, Class Y, and Class Z shares. This represents an increase of approximately 4.3% from $6.08 NAV as of Dec. 31, 2022.
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