Chapman University has paid top dollar for a 250-unit apartment building about 2 miles from its campus, in Anaheim’s Platinum Triangle, with plans to convert the property into student housing.
The university—Orange County’s largest private university by enrollment—said it paid $160 million for the 312,342-square-foot complex, called Anavia, which opened in 2009.
It is expected to add 800 beds to the Orange-based university’s stock of campus housing.
San Mateo-based Essex Property Trust Inc. (NYSE: ESS) sold the midrise complex, which is at 2045 S. State College Blvd., near Orangewood Avenue and across the street from Angel Stadium.
Chapman paid $640,000 per unit, the third priciest local apartment sale reported in OC this year, on a per-unit basis.
Essex nearly doubled its investment in this month’s deal; the real estate investment trust paid $80.6 million for the apartment in 2010, marking a 99% premium.
Hundreds of Millions Invested
The complex, which will be renamed Chapman Court, is part of the university’s strategy to increase its inventory of student housing following concerns from Old Towne Orange residents.
“This new student housing building is a win-win both for our students and community alike. Our neighbors asked us to house more students in Chapman-owned residential facilities and we listened,” said Harold Hewitt Jr., the university’s executive vice president and chief operating officer.
The university has invested “hundreds of millions in student housing over the past several years” to meet the organization’s goal of housing 50% of its students on campus, Hewitt added.
The new building raises the university’s capacity to almost 55% of the total undergraduate population, which totaled about 10,000 in 2021.
Chapman Court is less than a mile from Chapman Grand, a 900-bed student housing property also in Anaheim’s Platinum Triangle. Chapman paid $148 million for the apartment, formerly a 399-unit property called Katella Grand in 2015.
In 2019, Chapman delivered The K, a 401-bed dorm just across the street from its Orange campus. Chapman invested $47.4 million in that project.
“I am extremely excited to be adding an additional residence hall of the caliber of Chapman Grand to our student housing options,” said Chapman University President Daniele Struppa. “We have seen remarkable success with the Grand, and I look forward to creating a similar experience with the new Chapman Court.”
First- and second-year Chapman students are required to live in campus housing. Demand has grown in recent years; between 2017 and 2019, the university saw a 175% increase in demand from juniors and seniors requesting campus housing “due to the appeal of apartment-style housing options,” the organization said.
Class A Amenities
An opening date for Chapman Court has not been set.
The complex was nearly 100% occupied following the time of sale. The building counts a mix of one-, two- and three-bedroom units averaging 1,308 square feet and asking rents averaging $3,278 per unit, according to CoStar Group data.
Amenities include a pool and spa, fitness center, business center, courtyard and clubhouse.
The deal also signals a new vote of confidence for OC’s rental scene. It marks the 11th reported apartment sale priced above $150 million in the past year, and the third in the past month.
In October, a venture backed by Pacific Life Insurance Co. acquired the 280-unit Fusion apartment complex in Irvine in a $155 million deal, and Anaheim-based Sierra Corporate Management and Investment Property Group paid $190 million for the 363-unit Rize Irvine Apartments.
While the University of California, Irvine faces its own challenges finding housing for its students on campus and in nearby communities, those two just-sold Irvine properties aren’t being converted into student housing.
“The average household income for residents of Rize is nearly 25% higher than the city of Irvine,” said CBRE Executive Vice President Dean Zander, who represented the seller in the deal along with Stewart Weston.