Scion Group Makes $1.5B Student Housing Bet

Several weeks ago, the Scion Group conducted the largest student housing transaction of the year. Evidently, executives from the firm were not done shaking up the sector.

The Chicago-based company reached a deal to purchase Atlanta-based Student Quarters for approximately $1.5 billion, Bisnow reported. The acquisition is expected to close in the third quarter.

Once the deal closes, Scion will add another 13,000 beds to its growing student housing empire. Its portfolio will consist of 190 properties and almost 118,000 beds across close to 100 markets.

There’s already a ton of overlap between the two companies, as Student Quarters operates in 77 percent of the same markets as Scion, which may not be done with its dealmaking mode.

The Student Quarters platform is expected to be folded into Scion’s larger operations. It’s unclear if layoffs are on the table, though a spokesperson for Scion told the publication that several members of Student Quarters’ senior leadership will help with the transition.

“This acquisition is at the center of a historic period of growth and investment for Scion, with aggregate capital deployment activity exceeding $5.0 billion over the last two years,” Scion chief executive officer Robert Bronstein said in a statement.

Just last month, a joint venture between Scion and Los Angeles-based Ares Management purchased a 12-property student housing portfolio from Christopher Merrill’s Harrison Street Asset Management for $910 million. The deal involves 7,578 beds, valuing the assets at $120,000 per bed, with properties located near major schools including Auburn University, Arizona State University and Washington State University.

Student housing is viewed by many in real estate as a solid, if unspectacular, recession-proof sector, proving more reliable than other multifamily counterparts. An international enrollment dip prompted by the administration’s hardline immigration policies choked off the sector’s rent growth in recent years, though.

— Holden Walter-Warner