University Gateway purchased for $200 million

University Gateway, a popular student housing option across the street from the University Park Campus at the corner of Jefferson Boulevard and Figueroa Street, was sold in October for more than $200 million to a Wisconsin public employees pension fund.

Off the market · The apartment building, which was purchased for $200 million in October, contains 421 units with 1,656 beds. – Joseph Chen | Daily Trojan

Gateway, which charges about $1,000 a month per bed, was built by Los Angeles developer Urban Partners in 2010. The complex has 421 units with 1,656 beds and offers amenities including rooftop balconies, study rooms and a gym.

The deal was closed by the CBRE’s National Student Housing  Groups to Blue Vista Capital, which purchased the eight-story complex on behalf of the State of Wisconsin Investment Board.

The student housing was considered prime real estate, given its close proximity to campus, according to CBRE’s National Student Housing Group, which aided in closing the deal at the end of October.

“It is a high quality asset because its location is irreplaceable,” said Jacyln Fitts, the associate director of CBRE’s National Student Housing Group. “We worked as the brokerage firm that represented the Urban Partners who developed the property. We brought it to market in the spring of 2012 -… and then assisted them in selling the deal.”

Because of confidentiality, Fitts was unable to comment as to whether USC was approached about the building or whether the university put forward a bid.

Neither Gateway management nor the USC Real Estate & Asset Management were available for immediate comment.

Under the sale, Peak Campus Management, which manages more than 30,000 beds nationwide, will managed the property, according to Blue Vista Capital President JD Goering.

Though there will be a change in management, Goering assured that there is unlikely to be any major changes in management style.

“There will be no impact on students,” said Goering. “We’re going to look into some upgrades. Obviously, the property is pretty new so there’s not a lot that needs to really be done.”

Some Gateway residents believe management could improve operations. Isabel Khalili, a junior majoring in music industry, said Gateway’s new management has potential to better improve the complex’s allocation of resources.

“Gateway’s problem is that they hype it up,” said Khalili.  “It’s a brand new building, but it seems like they never really cared to finish it. The ceilings still look terrible. If I were living in an old house that were cheap, and if I had my own room I wouldn’t care as much, but I’m paying so much to live in these rooms that are basically unfinished.”

To Goering, the top priority is making the change in management as smooth as possible.

“It’s going to be a seamless transition,” Goering said. “Our goal … is really that the student doesn’t even know that anything has been disrupted. They might have to write their rent check to a different name, but hopefully the experience will be improved upon with strong customer service and maybe some amenity and upgrade changes that can be done in the future.”

14 replies
  1. Josephine
    Josephine says:

    At USC, student housing is a life or death matter as well as a core component of financial survival for many families of USC students. I don’t care whether USC owns Gateway as long as the beds are full, students there are safe, and the prices don’t become even more outrageous. I do care whether USC leaders continue to shrink their duties to provide safe housing for USC students. USC’s continued refusal to provide student housing will only lead to more dead or maimed students, more ratings drops, and more parents of brilliant students who can’t afford USC. The ultimate effect of all these negative impacts will be the replacement of USC’s leadership.

    • North University Park
      North University Park says:

      Has anyone figured out or care about the price per unit of this purchuse? It works out to about 475K per unit. At that price you could buy 421 houses in the ‘hood and still pay a commission.

      The revenue must be pretty rich to justify that.

  2. Tom
    Tom says:

    Just to make it clear from the other comments, Gateway has always been a private building. No USC money was used in construction although USC does lease space on the ground floor for offices.

    • North University Park
      North University Park says:

      Gateway leases by the bed. Most private non-university housing providers are not able to do that (legally).

      Leasing by the bed is common practice in University housing and is forbidden under Los Angeles’ rent control ordinance except for “dormitories”.

      The $200M price recently paid for Gateway can only be justified by a high gross multiple achieved by a by “the bed” unit rate.

  3. vince
    vince says:

    Nice job letting this one get away USC. Our students are assured more years of price gauging by private industry of students who are there compliments of USC.

    Makes no sense to let someone else buy this.

          • North University Park
            North University Park says:

            From the Gateway web page:

            “In June 2005 Urban Partners completed ground lease and sublease transactions with The Shammas Group and University of Southern California (USC) to develop a premier residential site for students of USC. Urban Partners then formed a joint venture with Blackstone Real Estate Advisors to develop 421 rental units that can provide up to 1,600 beds for USC students.”

    • Tex
      Tex says:

      @ Vince,

      No one forces you to live-in the “high-end” housing that has been built by private investors around the USC campus. You certainly don’t need underground parking, pools, stainless steel kitchens with granite counter tops and in-building gym facilitates to attend college. Don’t begrudge those who have seen the profit potential in this generation of overindulged kids and their foolish parents who seek to coddle them in comfort and accoutrements.

      @ North University Park,


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