A joint venture between Coastal Ridge Real Estate and Brookfield acquired The Grad, a 1,039-bed student housing tower in downtown San Jose, for $204M. The Grad was fully occupied when the sale closed. That's the part that snags you.
The sale was promoted after the former owners had trouble refinancing the property amid high interest rates, according to the Silicon Valley Business Journal. Swenson CEO Case Swenson told the SVBJ that the primary investors lacked the capital necessary to obtain refinancing. “If I could hold on to it, I would,” Swenson said.
I read this as the capital cycle doing what it does: a performing asset changes hands because the cost of keeping it got too high.
The Grad was refinanced in November 2024 by ACORE Capital Management, which provided a $150M loan to Swenson and Amcal, The Mercury News reported.
The Grad is a 19-story Class-A high-rise at 88 E. San Carlos St., one block from San Jose State University. The 543K SF L-shaped tower was completed in 2020 by developers Amcal and Swenson and has 260 units across 17 floors.
I'd watch for more of these: fully leased, recently built assets trading because refinancing got too expensive, not because the building failed.
For an owner facing a refinancing wall, what price is worth letting go?