ICON Student Housing OZ Fund | Jackson Dearborn Partners

Overview: 274-bed new-construction student housing project located just 2.5 blocks off the University of Illinois campus. The university experienced record Fall 2019 enrollment of 51,196 and a record freshman class of 7,665. Its engineering and computer science programs are internationally recognized.

Opportunity: Joint-venture equity offering of $8.075m; 60 percent of equity returned at stabilized refinance in year 3; 10-year IRR of 15.73 percent; Qualified Opportunity Zone

Sponsor: Jackson Dearborn Partners & Green Street Realty, a partnership with nearly 3,000 units owned of multifamily and student housing in Central Illinois; 15 development projects in the pipeline

EXECUTION
The partnership of Jackson Dearborn Partners, Sub4 Development, and Green Street Realty have been buying, building, and managing
properties in the Campustown area near the University of Illinois for over 10 years. In the last 5 years alone, the partners have developed 17
student housing projects in the immediate area, currently leased to an occupancy just over 99%.
MANAGEMENT
Green Street Realty, founded in 1996 in Champaign, IL has over 3,000 units under management, all in Central Illinois. In addition to the newly
developed and owned properties mentioned above, Green Street manages another 3,100 beds of student housing in the U of I market, from
single homes to large off campus properties like Place at 117 (584 beds) and Capstone Quarters (496 beds). The current student housing
portfolio boasts an occupancy of 95% with Campustown locations leased over 99%.
UNIVERSITY MARKET
The University of Illinois is the flagship public research university in the state of Illinois with a record enrollment of 51,196 in Fall 2019. The
school has posted 10 straight years of growing enrollment and with a record freshman class of 7,665, appears poised to continue that trend.
UIUC is internationally known as a top engineering and computer science school and attracts a diverse student body from all 50 states and
abroad. The off campus student housing market has seen fairly prolific development to keep up with this demand but maintains an overall
97% market occupancy.
LOCATION
ICON is the best new construction project in the Green Street portfolio, just 2.5 blocks off campus, directly across the street from County
Market grocery store, and one block from the bars and restaurants of Campustown's iconic Green Street and walking distance to class and
all the athletic facilities, a simply irreplaceable location. The project is closest to the university's engineering campus and the unit mix, heavy
on Studio, One, and Two Bedroom units, reflects that tenant base.
CONSTRUCTION
Sub4 Development has emerged as the premier construction company for this type of project in Champaign. ICON will feature a first floor
podium with 54 spaces of covered parking, indoor bicycle parking, 4,485 square feet of leasing and amenity space, and seven walk-up units.
The second floor features a rooftop amenity deck with outdoor grilling area and hangout space and deck-side units. The residential units are
a mix of Studio, One, Two, Three, and Four Bedroom units, all with bed-bath parity.
UNDERWRITING & EXIT
With construction starting in Spring 2020, ICON will open in August 2021 for the 2021-22 academic year. Like all the new construction
student housing projects managed by Green Street Realty, occupancy in the first year is expected to be 100%. At full stabilization with a year
of operation in the rear view, we intend to refinance the property with long term, non-recourse debt, likely Fannie Mae or Freddie Mac. This
will allow for a capital event in which we hope to return approximately 50% of committed capital to investors. Assuming an Opportunity Zone
tax beneficial strategy, hold period will be 10 years with cash-on-cash returns of approximately 22% per year and a project level IRR of 19%.