CA Ventures has been bought out of a student housing portfolio of more than 20,000 beds in college towns across the U.S. by QuadReal Property Group, a Canadian asset manager that already owned 50 percent of the platform.
The two entities closed a deal last week for QuadReal to take over 100 percent of the portfolio under terms that were not disclosed. QuadReal had made various investments into individual projects by CA Student Living as of 2020, when QuadReal took its initial stake in the unit.
The transaction comes as Chicago-based CA Ventures — the previous parent of CA Student Living, LLC, the entity that was acquired by QuadReal — faces scrutiny for multiple development delays that sent students scrambling for housing as a new academic year started in late summer. Among other problems are allegations that contractors are going unpaid on the company’s projects, as well as lawsuits filed by lenders and the landlord of its LaSalle Street office space and a former COO.
“On September 21, 2023, we took the step to fully acquire the CASL business to protect the employees, residents, our assets and other investors that own real estate with CASL,” QuadReal, which manages a portfolio of nearly $74 billion in assets, told The Real Deal in a statement.
The portfolio consists of 42 properties, including six that are under construction and experiencing various delays , QuadReal said. Affected projects ranged from Austin, Texas; Berkeley, California; Minneapolis, and Pittsburgh to Gainesville, Florida.
Tom Scott, CEO of CA Ventures, declined to comment, other than to criticize the accuracy of The Real Deal’s reporting without specifying any errors. His firm has been the subject of intensifying scrutiny by renters who pre-leased unfinished units and are now facing move-in delays, and contractors who claim they haven’t been paid millions of dollars owed by the developer for work on multiple properties.
CA Student Living was ranked as the seventh-largest owner of student housing in the nation by trade publication Student Housing Business in December 2021, with 24,000 beds at the time across 52 properties.
“We know delays in construction and changing move-in dates have disrupted the start of the school year for many and has had a direct impact on our residents,” QuadReal said. “We are sorry for all that students have had to endure and we are working as diligently as we can to deliver on our development commitments.”
Several hundred CA Student Living employees now work for QuadReal as part of the deal, the company said. QuadReal will continue using the CA Student Living brand name at its properties for now.
Meanwhile, litigation involving CA Ventures remains ongoing in multiple jurisdictions, with a trial set to start in November in a Delaware court case brought by former COO J.J. Smith, who alleged Scott lowballed him when Smith tried to cash out his shares in the privately held affiliates of CA Ventures.
Various other lawsuits involving CA Ventures affiliates and Scott are moving through court as the firm attempts to fend off disputes with lenders and its office landlord Jaime “Jay” Javors at 448 North LaSalle Street. The building owner claims CA Ventures owes nearly $1 million in back rent, and multiple people familiar with the property said Scott’s firm hasn’t moved into the space despite its announcement of its intent to lease the building several years ago.
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