Core Spaces (“Core”), Schenk Realty and Kayne Anderson Real Estate (“KA Real Estate”) announced the closing of a $233.3M construction loan to finance the development of Hub Knoxville, a multi-tower, nearly 2,000-bed purpose-built student housing project located in the heart of Knoxville, Tenn. PNC Bank acted as the administrative agent and PNC Capital Markets LLC acted as the joint lead arranger. Truist acted as a joint lead arranger and syndication agent, TSB Capital Advisors acted as the financial advisor on the transaction and Webster Bank and Bank United also participated in the credit facility.
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Exterior rendering of Hub Knoxville, the multi-tower, nearly 2,000-bed purpose-built student housing project located in the heart of Knoxville, Tenn. (courtesy of Core Spaces and Dwell Design Studio)
“Today’s market conditions present unique challenges for a project of this scale. We’re thrilled to partner with Schenk Realty and continue our long-standing equity relationship with Kayne Anderson, and to have worked with this dynamic group of lenders to deliver the most exciting project yet at the University of Tennessee,” said Andrew Wiedner, Executive Managing Director and Chief Capital Officer at Core Spaces. “We’ve had our eye on Knoxville for years, and we’ve worked closely with the city to create an electrifying project that will not only provide additional housing to the growing market, but also bring additional restaurants and retail to serve the community and UT students.”
“We’re excited to bring Hub Knoxville, the latest development in a growing tenure together, to life with our exceptional partners at Core Spaces. We could not have worked with a better team in Core Spaces and TSB to secure debt in today’s market, and our teams served as true complements to each other to secure our bank syndicate, negotiate a favorable structure, and work towards a rapid close,” said Brian Cannella, Senior Managing Director of KA Real Estate.
Located along Cumberland Avenue near the University of Tennessee, Hub Knoxville will feature three towers, including two 10-story buildings and one 7-story building, with a total of approximately 600 units and nearly 2,000 beds in studio through five-bedroom floor plans. The mixed-use development will also feature an estimated 30,000 square feet of retail space and a roughly 1,800-stall parking garage. Through a partnership with Covenant Health, Hub Knoxville’s parking garage will provide essential parking spaces dedicated to the Fort Sanders Regional Medical Center and East Tennessee Children’s Hospital. Spanning over four acres, this project marks the largest student development in Knoxville’s history and will greatly contribute to the transformation and revitalization of “The Strip,” the city’s main hub downtown.
“We want to thank Covenant Health, our partner in developing the parking garage, and East Tennessee Children’s Hospital in supporting our project. This is a complex, multi-phased development that, at the end of the day, would not have been possible without the assistance of KCDC, and more specifically Ben Bentley and Jim Hatfield along with the City of Knoxville, and more specifically, RJ Justice and Mayor Kincannon. Together, we were able to develop a shared vision for the re-development of the Cumberland Avenue Corridor,” said Jared Schenk, Principal of Schenk Realty.
Hub Knoxville’s exterior will complement the local landscape by utilizing modern forms and elements that are enhanced by traditional brick facades and details that celebrate the heritage of the region. In keeping with Core and Schenk Realty’s approach to creating next-level residential experiences, the property will offer high-design interiors, refined finishes and a top-of-market amenity package, including a resort-style rooftop pool deck with unmatched views of the University and downtown, a courtyard with grilling stations, a spa & fitness center, private study rooms, and a coffee shop.
Construction began in spring 2023 and the project is slated to deliver in phases in fall 2025 and 2026. Core Spaces and Schenk Realty are co-developers on the project with Juneau Construction Company serving as General Contractor, Antunovich Associates as Design Architect, Dwell Design Studio as Architect of Record, and Parini Design as Interior Designer.
Hub Knoxville is expected to create between $700 million to $800 million in economic impact during construction, which includes supporting more than 3,800 jobs.
About Core Spaces
Core Spaces (“Core”) is more than a real estate company, it’s a people company. Where building relationships is just as important as building properties. From researchers and architects to designers and operators, Core is made up of risk takers and dreamers who are on a mission to invent the future of living. Everything Core does stems from this culture of collaboration and innovation, and the drive to constantly improve the resident experience. This unique approach has led to creating spaces and services that are redefining the way people live.
Founded in 2010, Core is a vertically integrated company, focused on acquiring, developing, and managing residential communities that feature world-class amenities, progressive design, and hospitality-driven client service. The Core ecosystem includes student housing, build-to-rent (“BTR”) single family homes and credit. In its award-winning student portfolio, Core currently owns and/or manages over 23,600 beds – and has a pipeline of over 35,500 beds. In 2020, Core launched its BTR division with a pipeline of over 8,000 homes in high growth metros across the country. For more information, visit www.corespaces.com.
About Schenk Realty
Schenk Realty, founded in 1998 by Jared Schenk, maintains a singular focus on developing and owning the best product in the marketplace. This mission to satisfy our tenants’ needs and investors’ financial goals, has led to 25 years of success in which we have acquired and developed over 25,000 beds in university markets across the country. Schenk Realty currently owns over 4,000 beds, is under active construction on 2,000 additional beds and has a development pipeline of over 2,000 beds. Mr. Schenk oversees all aspects of the business, including acquisitions and dispositions, construction, related financings, and asset management. Institutional partners have included: Greystar, Blackstone, EdR, and GEM Realty.
About KA Real Estate
Kayne Anderson Real Estate ("KA Real Estate") is a leading real estate private equity investor in medical office, seniors housing, off-campus student housing, multifamily housing and self-storage. KA Real Estate manages $14 billion of real estate AUM across opportunistic equity, core equity and real estate debt. KA Real Estate is part of Kayne Anderson Capital Advisors, L.P., a $32 billion alternative investment management firm with more than 39 years of successful experience in the real estate, infrastructure, credit, and growth capital sectors (as of 6/30/2023).
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Contacts
Kim Lyons, Director of Communications, Core Spaces
Email: klyons@corespaces.com
