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Published:   July 11, 2014
Volume:   XX    Number:   27

STUDENT HOUSING PROJECT AT ASU SOLD TO TIC GROUP FOR $38.7 MILLION

Tempe – Three tenant-in-common entities paid $38.7 million ($172,000 per unit) to acquire the 225-unit Block 1949 student housing property located east of Arizona State University at 1949 E. University Drive in Tempe. The new owners of the 640-bed complex have renamed the project Regents on University. Two of the three buyers, accounting for 85 percent ownership, are companies formed by Consolidated Investment Group (CIG) in Englewood, Colo. (David Merage, principal). Maricopa County records show Regents Tempe RE LLC paid just under $21.382 million for 55.25 percent ownership interest and Regents Tempe RE II LLC paid $11.513 + million for a 29.75 percent interest. Both entities were formed by Consolidated Investment Group. The other 15 percent was acquired for $5.805 million by CWS 1949 LLC, a company formed by CWS Capital Partners LLC in Newport Beach, Calif. (Steve Sherwood, chairman). All three tenant-in-common companies paid cash for ownership in the student housing project. The seller was Block 1949 LLC in New York City, N.Y. That company was formed by German American Capital Corp., a subsidiary of Deutsche Bank. The Tempe property was sold through Hanover Street Capital LLC, an advisor to Deutsche Bank that assists in the disposition of the bank’s commercial real estate assets. The sale was brokered through John Cunningham and Charles Steele of Jones Lang LaSalle in Phoenix. In January of this year, Block 1949 LLC took title to the property through a trustee's sale after the previous owner defaulted on a loan that was secured by the 6.35-acre project. In March 2011, BREW reported a venture formed by Pierce Education Properties in San Diego, Calif. and Partners Group of Switzerland paying $52 million ($231,111per unit) to buy Block 1949. The acquisition was financed with a $38.5 million loan from German American Capital Corp. The four-story complex, which was developed in 2010 by JLB Partners L.P., is located east of the southeast corner of McClintock and University drives. Regents on University is the first direct investment in the Valley for Consolidated Investment Group and CWS Capital Partners, both privately-held companies. Consolidated Investment Group owns 30,000 + apartments and 24 + million sq. ft. of office and industrial buildings located across the U.S. and Europe. In 2002, Merage's family sold Chef America Inc. to Nestle in a $2.6 billion cash deal. Companies formed by family member Greg Merage (as principal of MIG Real Estate LLC of Newport Beach) have invested $153.553 million in buying several multi-family, office and hotel properties in the Valley. CWS Capital Partners owns more than 20,000 multi-family units in several states, but most of them are primarily located in Texas. Tim Bertoch is the contact at Consolidated Investment Group . . . (303) 789-2664, ext. 202. Gary Carmell is the contact for CWS Capital Partners . . . reach him at (949) 640-4200. Allen Hanson of Hanover Street Capital is at (212) 380-9358. Cunningham and Steele are at (602) 282-6300.

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