CSU may buy Edge as investment action climbs in student housing sector
The Edge on Euclid, the 11-story structure at 1750 Euclid Ave. in Cleveland, looks poised to change hands to Cleveland State University. It’s one of three transactions in the region perking up the nascent apartment sector.
A certificate that signals a buyer’s planned purchase of a residential or commercial property, filed Feb. 18 with the city of Cleveland’s building department, reports that the potential Edge buyer’s address is 2121 Euclid Ave. AC 327. That is the mailing address of CSU’s general counsel at its administration building.
Edge is among three dedicated student-housing developments that have helped CSU develop a residential offering seen as helping to transform it beyond its roots as a commuter college. The building opened in 2017 with 564 bedrooms, which share joint kitchens and living rooms in a total of 237 suites.
Since 2019, the complex has been owned by an affiliate of Goldenrod Capital Services, an Omaha, Nebraska, wealth management firm that has developed or bought a portfolio valued at $4 billion, according to its website.
A sale price was not disclosed when Goldenrod, through 1750 Euclid LLC, acquired the property from its original developers, a joint venture by Korman, a St. Louis real estate developer, and Clayco, a design-build construction company with headquarters offices in St. Louis and Chicago.
The county assigns a market value of $27 million to the property.
Buying Edge would give CSU a campus reaching west into Playhouse Square, where the university has expanded film and theater offerings in properties leased or shared with Playhouse Square Foundation, which operates the restored vaudeville theaters in the district. Edge also is across the street from the Maxine Goodman Levin College of Urban Affairs, which borders the theater district on the north side of Euclid.
Enhancing and expanding student housing at CSU is part of university president Harlan Sands’ growth plan for the school, referred to as “CSU 2.0.” Buying an existing property adds to the university’s stock of housing with the quick movement of a pen, versus the years it takes to obtain site control and funds to add student housing. The university has also hired Sasaki, the Boston-based master planning and architecture firm, to create a new master plan.
CSU does not comment on the potential sale or purchase of real property, according to Alison N. Bibb-Carson, the university’s executive director of strategic communications. Recent board of trustees meetings, including Thursday, March 17, do not reflect efforts to buy a property, but such acquisitions may be discussed in secret session under the Ohio Sunshine Law governing state bodies.
Purpose-built student housing has developed as a new sector of real estate since the 1990s. One of the big attractions is that it was considered recession-proof compared with other apartment and property sectors.
However, it’s not pandemic proof. Student housing took a hit as colleges shut down or instituted virtual learning programs to combat the spread of COVID-19. That is coming to an end as the nation seems to be emerging from the pandemic’s shadow.
Other purpose-built housing for college students has had a checkered experience in Northeast Ohio.
Latitude at Kent, a five-story building at 1450 E. Summit St., was acquired for $31 million in late December by Singapore-based real estate investment trust Ascott Residence Trust as part of a purchase of a portfolio of eight properties across the United States for $213 million.
Ascott said at the time it announced the deal that Latitude was 98% leased in 2021 and consists of 384 bedrooms in 126 units.
Meantime, The Depot, a 624-bed, 192-unit student housing project at 80 E. Exchange St. that serves the University of Akron, is listed for auction by Ten-X Capital and Colliers International, with a starting bid on April 11 of $7 million.
The three-story building, owned by Rialto Capital Management, a Miami firm that buys distressed properties and handles special servicing needs of lenders for troubled properties, was constructed in 2014 and has about 90% occupancy, according to auction information.