Dive Brief:

• The Scion Group continued its aggressive growth in the student housing space by acquiring a four-property, 2,316-bed portfolio from SCHENK+, in partnership with Ares Real Estate funds, for $400 million, according to a press release.
• With the purchase of the four-property portfolio, Chicago-based Scion expands its presence in markets serving Texas State University, the University of Tennessee and the University of Georgia, per the release. The firm currently operates assets in three markets, which should provide management efficiencies.
• SCHENK+ developed three of the assets and acquired and repositioned the fourth. The firm, founded by Jared Schenk nearly 30 years ago, focuses on serving Tier 1 public universities, per the release. “This transaction provides a comprehensive exit for him and his investors,” said Robert Bronstein, CEO of The Scion Group, in the release.  

Dive Insight:

The four-property acquisition is the latest in a series of deals from The Scion Group.

In June, Scion announced it would buy the operating business of Student Quarters, an Atlanta-based owner, operator and manager with interests in roughly $1.5 billion in student housing assets.

Scion funded the acquisition, which included 13,000 beds across 21 markets, from its own balance sheet, with no outside investors or financing, per the release. The price was not disclosed. 

The Student Quarters deal encompasses 29 buildings, Bronstein previously told Multifamily Dive in emailed comments.

While the Student Quarters deal had no outside investors, Scion has also partnered with private equity firm Ares Management Corp., after a May announcement that the two companies formed a partnership to invest in off-campus student housing.

The firms’ first purchase was a 12-property, 7,578-bed student housing portfolio spanning universities across the country, bought from Harrison Street Asset Management for about $910 million.

The partnership reflects the firms’ “shared conviction in the long-term strength of the student housing sector.” It will focus on high-quality assets in markets with “strong enrollment fundamentals and limited new supply,” according to the release.

The May acquisition reflected broader structural trends shaping the student housing industry, per Scion, including “consolidation of a historically fragmented market and the continued movement of institutional capital into operationally intensive, need-based real estate.” Scale matters more than ever, a Scion spokesperson told Multifamily Dive in emailed comments.

“Larger platforms can invest in technology, data analytics, revenue management, and centralized operations in ways that create efficiencies and improve performance,” the Scion spokesperson said. “As the sector has become increasingly institutionalized, we’ve seen greater demand for experienced operators with the scale and expertise to execute across multiple markets.”

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