The University of California just dropped a huge chunk of change on a portfolio of student housing properties in Isla Vista.
UC Santa Barbara today announced the acquisition of Tropicana Gardens, Tropicana Del Norte and the Tropicana Villas. Terms of the deals weren’t disclosed, but according to Business Times research all three properties were purchased for about $156.4 million on June 4.
The sales are by far the largest commercial real estate transactions in recent history, shattering a recent highwater mark in March of $38 million for the Icon and Icon Gardens complexes.
Tropicana Gardens, located at 6585 El Colegio Road, was originally purchased in September of 2010 for $64.5 million by entities affiliated with Indiana-based Equity Capital Group and a sister corporation, Chicago-based Blue Vista Capital Management. The UC shelled out $92 million for the property.
Tropicana Del Norte at 6525 El Colegio Road and Tropicana Villas at 811 Camino Pescadero were purchased together by the UC for roughly $64.4 million. The same firms that sold Tropicana Gardens also owned those properties, having picked both up in 2010 for $6.9 million but also assuming about $30 million in debt.
According to a release from UCSB, the long-term goal is to integrate these properties into the university’s academic and social programming. The Tropicana portfolio includes about 200,000 square feet of residential space and houses around 1,050 students.
Non-UCSB students will likely have to find new places to live once their leases are up.
“These will remain student residences, which in some cases do contain some meeting rooms for student groups. We don’t expect there to be other major facilities that wouldn’t normally be associated with student residences. During the transitional period we will honor all existing leases and agreements,” said University spokesman George Foulsham in an email to the Business Times. “As for the future, we do expect the units to be integrated into our campus housing portfolio, as stated, but we don’t exactly know what the needs of our students will be. We expect to make renovations, but we do not have any specific plans at this time.”
Working closely with neighbors and members of the community as well as students and trustees, the university has been asked to invest more in Isla Vista and play a more active role in the community, the press release states. The deals are a demonstration of the University’s commitment to improving the quality of life in Isla Vista, the release continued.
Last year, all three properties generated about $1 million in property taxes. That will disappear from local government coffers due to the university’s tax exempt status.
“This was a unique opportunity for the university to make a significant impact and demonstrate our ongoing commitment to the community,” said John Longbrake, associate vice chancellor for communications in the release. “We look forward to working with the county, local officials, students and residents to continue to strengthen the connections between the campus and Isla Vista.”