Campus Crest Communities Inc. (CCG), along with its joint venture (:JV) partner Beaumont Partners SA, disclosed the acquisition of their second Québec-based hotel which they plan to convert into a student housing building. This is part of the companies’ efforts to strengthen their JV position in Montreal's flourishing student housing market.
The JV had bought their first Montreal asset – Delta Centre-Ville Hotel – in Québec for approximately $60 million, last year. Notably, Campus Crest has 35% stake in the JV, while Beaumont holds the rest.
The currently acquired property is located on Sherbrooke Street, near McGill University, and is in the center of the urban university community surrounding the campus. The asset will be converted under the Campus Crest’s new brand concept – evo – which is aimed at targeting mature undergrads and grad students who opt for upscale urban student housing complexes. Campus Crest has initiated this concept in Aug 2013 to boost its product offering. Notably, along with high-end and lavish amenities, students will be able to avail security services from professional staffs.
The JV partners, in concurrent with the buyout of Holiday Inn Midtown, obtained a new loan to facilitate the conversion of both hotels into evo-concept student housing properties. This was financed by Bank of America Corp. (BAC), Royal Bank of Canada (RY) and Raymond James of Raymond James Financial, Inc. (RJF). Both the evo assets are projected to be complete by fall of this year and leasing is slated to begin in first-quarter 2014.
With the Holiday Inn hotel advantageously located near the renowned McGill University, we believe that Campus Crest will be able to experience substantial occupancy level. Furnished with basic and modern amenities, both the evo properties can therefore play a notable part in top-line growth and will strengthen Campus Crest’s footprints in Québec.
Currently, Campus Crest has a Zacks Rank # 5 (Strong Sell).