Sharia-compliant lending has come to Buffalo – sort of.
A student-housing complex in Amherst is part of a large international transaction, in which a Florida-based student housing management firm is partnering with an unidentified Middle Eastern investor that bought into properties in several states.
Colonie Apartments, a 184-unit community at 2061 Sweet Home Road near University at Buffalo's North Campus, is one of six properties that are part of the deal. It was valued at $14.03 million, according to a deed filed with the Erie County Clerk's Office.
What's unusual is that the joint venture between Vie Management of Miami and the foreign asset manager is structured to comply with Islamic laws governing finance, which prohibits payment of traditional interest. That's a growing but still lesser-known area of specialty in the United States that has become increasingly important as Muslim investors become more active around the world.
As part of the venture, a Dallas-based commercial finance firm arranged a $75.385 million loan over 10 years that meets the Sharia requirements.
In all, the purchase includes 911 units with 2,059 student housing beds in Alabama, Florida, Michigan, New York, Pennsylvania and Texas. Besides Colonie, the other properties serve University of Alabama in Tuscaloosa, Ala., Atlantic University in Boca Raton, Fla., Ferris State University in Big Rapids, Mich., Penn State University in State College, Pa., and Texas State University in San Marcos, Texas. Colonie is the third-largest of the properties.