Opportunity Summary
Valencia Realty Capital (VRC) recently assisted a client with an urgent capital need for a student housing asset in Athens, Georgia. This case study showcases VRC’s expertise in structuring flexible preferred equity solutions and swiftly securing capital to meet time-sensitive requirements.
Deal Summary
| Transaction Type | Student Housing Preferred Equity |
| Asset Class | Student Housing |
| Asset Location | Athens, GA |
| Preferred Equity Amount | $900,000 |
| Term | 5 years |
| Pricing | High-teens IRR |
| Last Dollar Leverage | Low 80s% |
| Prepayment | 6-month lockout period |
Sponsor Background
The sponsor is an experienced student housing operator with a strong track record in the Athens market. They approached VRC with an urgent need for capital to fund capital expenditures and deferred maintenance on their existing asset, as well as to secure funds for pursuit costs on another potential opportunity.
Transaction Execution
Upon recognizing the client’s urgent capital need, VRC initiated a swift and targeted approach to identify a suitable capital source. Leveraging their extensive network of investors, VRC quickly matched the client with a preferred equity provider known for their flexibility and understanding of the student housing market.
Within a compressed timeframe, VRC structured the preferred equity facility to meet both the sponsor’s immediate needs for the subject property and their desire for additional capital for new pursuits. This dual-purpose structure showcases VRC’s ability to create tailored solutions that address complex sponsor requirements.
Outcome
Valencia Realty Capital successfully closed the $900,000 preferred equity facility within a tight timeline, enabling the sponsor to:
- Fund necessary capital expenditures and deferred maintenance on the existing Athens student housing asset
- Allocate a portion of the funds for pursuit costs on a new opportunity, leveraging the unique flexibility of the preferred equity source
This outcome demonstrates VRC’s ability to navigate complex financing requirements and deliver timely solutions that go beyond traditional capital uses.
Conclusion
This case study exemplifies Valencia Realty Capital’s capability to structure creative preferred equity solutions that address both immediate asset needs and future growth opportunities. By leveraging deep relationships with flexible capital sources and thoroughly understanding client objectives, VRC ensures swift and favorable outcomes for its clients in the competitive student housing market.
Valencia Realty Capital remains committed to providing strategic capital advisory services that unlock value and foster growth for real estate entrepreneurs, particularly in specialized sectors like student housing where tailored solutions are crucial for success.
If capital of this nature may be of interest, book a call to discuss a potential capital arrangement. Read our last Market Insight: Quick Closing Bridge Capital for Middle Market Investments