Boston—CBRE announced the sale of a new generation, 150-unit student housing community serving the University of Massachusetts Amherst (UMass Amherst), the largest university by enrollment in the New England.
Athens, Georgia-based Landmark Properties purchased North 116 Flats from Dallas-based Fountain Residential Partners for an undisclosed price.Jaclyn Fitts, William Vonderfecht and Casey Schaefer with CBRE’s National Student Housing team and Biria St. John and Simon Butler with 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 asset in 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 state-of-the-art fitness and yoga studio. Pioneer Valley Transit Authority (PVTA) bus line stops onsite and connects directly to the UMass Amherst campus. Each student unit is fully furnished and includes designer lighting, granite countertops, private patios, 55” Smart TVs, wood-style plank flooring and stainless steel appliances. The UMass Amherst submarket is a proven and an extremely high-barrier-to-entry market for new development. Very few developments have been approved in recent history; Fountain Residential Partners underwent an approximately fifteen year entitlement process with the development of North 116 Flats. As part of the entitlement process, North 116 Flats was permitted pursuant to a Chapter 40B Comp Permit, with 25% of the units conforming to affordable housing requirements in perpituity. As part of the 40B Comp Permit, permanent financing was required 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 onsite waste water treatment facility which had to be certified by the Massachusetts Department of Environmental Protection, adding another level of complexity to the development. “North 116 Flats is a rare offering as very few purpose built student housing assets have transacted in the state historically,” said Mr. Schaefer, Senior Vice President at CBRE. “The MassHousing financing requirement for the asset added a layer of complexity to the transaction. Yet, the extremely compelling market supply-demand fundamentals and asset quality attracted significant investor interest.” The property has achieved over 95% occupancy in its first two years of operations. UMass Amherst also continues to attract a growing student body, enrolling 32,045 students in fall 2021 according to the University’s Common Data Set. This marks 13.5% enrollment growth over the last decade. Given limited supply currently available and forecasted in the market combined with UMass Amhert’s enrollment trajectory, North 116 Flats is well positioned to continue its strong performance.