Arbor Funds $21.2M for Student Apartments

BOSTON—Signifying ongoing support for the evolving student housing sector, Arbor Commercial Funding has refinanced The Lofts Apartments in Morgantown, West Virginia. A 10-year, $21.2 million instrument backed by the 218-unit property was funded under Fannie Mae’s DUS Dedicated Student Housing line, relays Arbor VP John Kelly, whose Boston operation accommodated the developer of a project serving the University of West Virginia, an institution of more than 28,000 attendees.

“We think it’s a very good (industry) to be in,” Kelly says this week during an interview where he explains Arbor is courting similar opportunities nationally. “We have a great product for (borrowers), and there are a lot more people focusing on it now,” he says, reflecting rising student populations and maturation from a niche offering to becoming increasingly accepted by institutional funds. Arbor usually will not pursue properties serving institutions under 10,000 enrollment, and prefers they be newer and close to campus. There are other nuances such as rental guarantees and building durability that weigh in on whether to finance an asset. “It’s a different animal from multifamily,” says Kelly, who had a busy 2011 accommodating the traditional sector. Morgantown was the only one he did of that ilk in 2011, but Kelly says the company “did our share” of lending on student-oriented properties. The coming year looks even more promising, he says.

The Morgantown developer’s two-year-old asset in an underserved community captured Arbor’s ardor and met the Fannie Mae criteria, and Kelly adds that management “has done an excellent job in all facets of the day-to-day operations.” The Lofts Apartments contain 648 available beds currently at 96 percent occupancy. Arbor deemed it to be attractive for continued success due to such attractions as a fitness center, movie theater, outdoor pool and campus shuttle. Unit amenities include dishwashers, fireplaces, granite countertops and patios. “It was well thought out,” says Kelly.