‘A win for students’: U of T acquires 20 per cent of privately owned CampusOne residence

In a deal that immediately adds as many as 890 beds to the university’s student housing stock, the University of Toronto has purchased a 20 per cent stake in the privately owned CampusOne residence located adjacent to the St. George campus.

U of T acquired the equity share from Knightstone Capital Management for $55 million.

While CampusOne was already affiliated with U of T, the ownership stake means the university can now place students directly in the 25-storey building on College Street (students previously needed to apply to CampusOne). U of T will also be able to influence residence programming and support services so they further align with those of the university’s existing residences, as well as its policies and procedures.

Scott Mabury, U of T’s vice-president, operations and real estate partnerships, said the deal potentially increases the number of beds in its portfolio by nine per cent, helping it to meet the rapidly rising demand for student housing.

“Not only will this acquisition allow U of T to better meet its first-year residence guarantee for fall 2024 in a residence directly adjacent to campus, it does so without the long lead time required to build a new residence – and without the costs and resources that entails,” Mabury said.

“For our students, staying in a residence operated by U of T and programmed by our Student Life people is important and desirable. This is a win for students, and therefore a win for the university.”

Mabury estimated the deal saves U of T at least $200 million compared to constructing a similar-sized residence from scratch.

“We paid 20 per cent to have [priority] access to the whole thing – all 890 beds. If we were building them ourselves, we would be spending at least a quarter of a billion dollars,” Mabury said. “I can’t overstate how good an outcome this is.”

The acquisition is one of several steps taken by U of T to address the growing demand for student housing on its three campuses.

Less than a kilometre away from CampusOne, at the corner of Spadina and Sussex Avenues, is Oak House, a new 23-storey residence that will house 508 students and is scheduled to open in fall 2024.

U of T Scarborough, meanwhile, opened Harmony Commons last year – a 746-bed residence dedicated to first-year undergraduate students that meets Passive House standards for energy efficiency. And U of T Mississauga is moving to build a new student housing complex on Residence Road, near its Oscar Peterson Hall and Schreiberwood residences.

Owen McCartney, director of asset management for U of T’s real estate team, said that the development period for a student residence is typically at least five years, whereas the CampusOne deal will have an immediate impact.

“These rooms can all now count toward the first-year residence guarantee, whereas previously they did not,” McCartney said.

Located at the corner of College and Huron Streets, CampusOne was constructed on land partially owned by U of T that was leased to Knightstone Capital Management. It offers accommodations ranging from studio apartments to single rooms in multi-bedroom suites. Amenities include a fitness centre, game lounges, movie theatre, arts studio and quiet study rooms.

U of T Food Services operates all-day dining programs in the building.

Negotiations for the acquisition began in spring 2023 and the transaction officially closed in mid-December. However, U of T was given the green light by CampusOne’s owners to begin placing students in the residence last summer before the deal was complete.

In addition to receiving 20 per cent of the building’s operating income, the deal will also see U of T earn a small fee for each student it places in CampusOne.

Mabury said the agreement is the latest example of U of T’s 4 Corners Strategy, which aims to advance the university’s academic and research missions by providing high-quality innovation space, student and faculty housing, and other key services – all while generating new revenue streams through ancillary retail and other leasing agreements.

“This deal is the result of years of work – including building the Real Estate and Partnerships team and bringing real estate expertise to the table – that are now generating new opportunities for the university.”