PGIM provides $109m to Morgan Stanley, GSA for student housing buy

PGIM Real Estate is widening its student housing exposure with a $108.5 million financing package for Morgan Stanley and Global Student Accommodation to acquire five assets in the category.

The January 17 deal was originated by the Madison, New Jersey-based investment management arm of Prudential’s core investment strategy for a fund managed by Morgan Stanley Real Estate Investing and Global Student Accommodation. It includes 548 units across properties adjacent to University of Texas at Austin, Northern Arizona University in Flagstaff and College of Charleston in South Carolina.

John Jacobs, global head of capital markets for GSA, said the deal is well aligned to the London-based investment manager’s long-term debt strategy. “The transaction has unlocked capital to further invest in our existing student housing portfolio, while growing our footprint in the region through targeted acquisitions,” he added.

The involved assets were originally acquired in September 2022 and have subsequently been rebranded and placed under the management of Yugo, GSA’s global operating partner.

The UT Austin property range includes three mid-rise assets totaling 175 units and 613 beds: Yugo Austin Corner, Yugo Austin Rio and Yugo Austin Nueces. The NAU asset includes 587 beds across 179 units and the College of Charleston asset features 419 beds across 194 units, as well as the college’s main recreation center.

“Despite the current economic environment and rising interest rates, PGIM Real Estate remains active in the market and continues to provide financing for our clients in sectors and across locations where we have conviction,” said Tom Goodsite, managing director, financing, at PGIM Real Estate, in a prepared statement.

PGIM has kept itself active in the commercial real estate debt market through the onset of new waves of volatility in 2022.

In November, the firm provided more than $1 billion in floating rate financing for a 22-asset multifamily portfolio, marking PGIM’s largest transaction of the year as well as one of the most sizable debt deals in the back-half of 2022. It previously added more retail exposure to its loan book with a $292 million portfolio financing in September 2022.