Greystone Housing Impact Investors LP, a well-known name in real estate investment, has cashed in big on student housing with the sale of Suites on Paseo in San Diego, California, to an affiliate of San Diego State University.
The property, better known as The Essential, boasts 384 beds and was sold for a hefty $40.7 million, factoring in the contract purchase price along with any advance master lease payments, according to a MultiHousing News report. It was back in December 2013 when Greystone snapped up a tax-exempt mortgage revenue bond for the property, only to grab the ownership reins two years later through a deed in lieu of foreclosure. Now, this transaction is seen as a strategic move for both the university and the investment firm, who seeks to channel the revenue into broader multifamily properties.
In the bustling student housing market of San Diego, The Essential stands out with its prime location just a few steps from San Diego State University at 5595 Lindo Paseo, not to mention its fully furnished one-bedroom apartments with in-unit bathrooms, a bundle of amenities like fitness centers, game areas, and even movie theaters, and, if that's not enough, over 110 parking spaces are also included in the 1-acre property.
Greystone's CEO Kenneth C. Rogozinski expressed the company's satisfaction over the deal saying, "We are pleased to announce the sale of Suites on Paseo and to be in a position to redeploy the Partnership’s investment capital into our core multifamily investment strategies," in a statement reported by Greystone's official press release. Notably, the sale is set to generate a gross gain of about $9.9 million within net income for the last quarter of 2023, before the settlement of final proceeds and expenses are accounted for, which underlines the financial acumen behind the initial investment and the timely divestment.
As for financial reporting nuances, the company anticipates a taxable gain on sale to the tune of approximately $5.9 million, earmarked for allocation to investors per Schedule K-1 for the 2023 tax year, as per Internal Revenue Service regulations, ensuring aligned investor relations and compliance with tax obligations.
