$36M financing arranged for Berkeley student housing community

LOS ANGELES, Oct. 21, 2024 – JLL Capital Markets announced today that it has secured a $36 million acquisition financing for Varsity Berkeley, a mid-rise student housing complex in Berkeley, California.

JLL worked on behalf of the borrower, Hawkins Way Capital LLC, in acquiring the two-year, floating-rate loan through Limekiln Real Estate Investment Management. The property will be operated as the FOUND Study Downtown Berkeley and will be managed by FCL Management, an operator of successful properties across select cities in the U.S., aligning with Hawkins Way Capital's strategy to maximize value in prime student housing markets.

Varsity Berkeley, located at 2024 Durant Ave., is situated just two blocks from UC Berkeley, a thriving campus with over 45,000 students and a recent 26.2% surge in enrollment. This prime location offers exceptional accessibility to a diverse array of shops, galleries, restaurants, theaters and community venues, boasting both a Walk Score and Bike Score of 96. The property's convenient setting also places residents only 15 miles from San Francisco, easily accessible via BART.

Berkeley's real estate market is characterized by high demand and limited supply, with over 60% of households renting and average home prices reaching $1.5 million. This competitive environment, coupled with Berkeley's proximity to major employment hubs and the prestigious UC Berkeley campus, has resulted in consistently low vacancy rates below 5% and strong annual rent growth exceeding 3.5% since 2018, making it an attractive location for real estate investment.

Varsity Berkeley, constructed in 2015, is a thriving student housing complex featuring 79 units with 159 bedrooms and a total of 308 beds, currently maintaining an impressive 93.5% occupancy rate. The property offers a variety of living options, including studios, two- and three-bedroom floorplans, with an average unit size of approximately 800 square feet. Each apartment boasts luxury amenities such as fully equipped kitchens with premium-grade countertops, tile backsplashes, stainless steel appliances, modern cabinetry and in-unit washers and dryers. Residents enjoy an array of community features tailored to student life, including a rooftop terrace with sun deck, controlled access, a 24-hour resident lounge, a courtyard with seating and firepits, ample bicycle parking and a pet-friendly environment.

JLL Capital Market’s Debt Advisory team representing the borrower was led by Managing Directors Brandon Smith and Annie Rice and Director Gyasi Edmondson.

"We are thrilled to have secured financing for Varsity Berkeley, a prime student housing asset in one of the nation's most competitive real estate markets. This acquisition, marking our company's fifth in Northen California, aligns perfectly with our strategy to create strategic value in markets where student housing demands continue to grow,” said Ross Walker, Managing Partner of Hawkins Way Capital. “We're confident that FCL Management's expertise will help us unlock the full potential of this high-performing property as we continue to expand our portfolio."

JLL Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers. The firm's in-depth local market and global investor knowledge delivers the best-in-class solutions for clients — whether investment sales and advisory, debt advisory, equity advisory or a recapitalization. The firm has more than 3,000 Capital Markets specialists worldwide with offices in nearly 50 countries.

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Jones Lang LaSalle Americas, Inc. ("JLL") is a real estate broker licensed with the California Department of Real Estate, license #01223413.

Hawkins Way Capital is a vertically integrated real estate investment firm managing $3 billion in assets for institutional and individual clients. The company specializes in value-add and opportunistic investments across diverse asset classes and geographical locations, focusing on niche investment theses to deliver attractive risk-adjusted returns. Leveraging its principals' extensive experience and network, Hawkins Way Capital executes strategies designed to create long-term value through a disciplined approach.

Limekiln Real Estate is an Alternative Investment Manager specializing in creative financing solutions for the multifamily sector. Based in New York and registered as an SEC Investment Adviser, the firm offers direct lending, high yield securities and special situations investments. Led by experienced real estate professionals with extensive multifamily expertise, Limekiln's team has successfully navigated multiple market cycles and established robust debt platforms.