Investcorp Acquires Two US Student Housing Properties

Bahrain-based Global alternative investment firm Investcorp on Wednesday announced that it has acquired two student housing properties in the US for $160 million.

Investcorp said the 914-bed assets at the University of Florida and the University of Texas at Austin further expand the company’s student housing portfolio and reinforces the company’s position as a leading acquirer of one-time, non-portfolio student housing assets over the past two years.

Michael O’Brien, Co-Head of US Real Estate at Investcorp, said that these new acquisitions in the student housing sector exemplified their strategy of investing in high-quality, off-campus student housing in dynamic and growing university towns.

“Investcorp was an early mover in the student housing market 12 years ago, and we remain confident in the sector given strong secular factors and continued strong fundamentals, including continued enrolment growth, limited new on- and off-campus offerings, and relative resilience to market cycles,” he said.

Real Estate Portfolio

Investcorp’s real estate portfolio, which was established in 1996 in the US, consists primarily of industrial and residential properties, accounting for 98% of its total holdings. Since the company began investing in student housing, it has owned and managed more than 16,500 beds in 25 student housing investments.

“Our national student housing portfolio is 99% occupied for the 2023-2024 academic year, and new additions to the University of Florida and the University of Texas at Austin appear to be significantly above market averages in terms of initial occupancy for the 2024-2025 academic year,” he added.

Ryan Bassett, Head of Residential Acquisitions at Investcorp, said that their acquisition activity in student housing over the past two years demonstrated their ability to invest capital in high conviction strategies at a time when many other investors were remaining on the sidelines.

“We continue to be very selective across markets, asset quality and business plans, and have taken advantage of this disruption to introduce more attractive valuations and lower risk strategies,” Bassett added.

Investcorp is consistently ranked among the most active real estate buyers and sellers in the US. According to Real Capital Analytics, the company is among the top-5 largest cross-border buyers and top-10 largest cross-border sellers of the US real estate over the past five calendar years ending 31 December 2023.

Investcorp’s strategic approach targets core-plus and light-value-add real estate investments throughout the US that generate strong cash flows while providing potential for capital appreciation through light-value-add opportunities and active management.