Corvias Campus Living: 65-Year P3 Collapses After Five-Year Default

Corvias Campus Living - USG, LLC—the private partner in a 65-year public-private partnership to manage approximately 10,000 beds of student housing across nine University System of Georgia campuses—filed chapter 11 in June 2025 after five years of default on more than $526 million in senior secured notes. The P3 structure gave the Board of Regents control over student housing fees while the private partner bore operating costs and debt service. Occupancy declined during the pandemic and operating costs increased.

The case resulted in a $208.5 million sale of the housing portfolio back to the Board of Regents—representing roughly 39% recovery for noteholders on claims exceeding half a billion dollars. The resolution ended what was touted in 2014 as a first-of-its-kind privatization model for state university system housing.

The Public-Private Partnership Model

The University System of Georgia's partnership with Corvias was the first time a state university system had initiated privatization of student housing through a portfolio approach covering multiple campuses simultaneously. When the Board of Regents announced the partnership in November 2014, it established a single concessionaire and manager for a multi-campus housing portfolio.

Partnership scope and term. Corvias entered into a 65-year concession agreement with the Board of Regents to design, build, renovate, manage, and maintain student housing across nine USG campuses. Phase 1 encompassed 3,753 new beds requiring construction and 6,195 existing beds slated for renovation, totaling approximately 10,000 student beds across more than three million square feet of living space. The transactional closing occurred on May 13, 2015, with Corvias Campus Living - USG, LLC established as the special purpose vehicle to hold the partnership assets.

Campus portfolio. The nine Phase 1 campuses spanned Georgia's public higher education system, ranging from major urban research universities to smaller regional institutions:

The Financing Structure.

Corvias Campus Living secured $548.3 million in taxable bonds in May 2015, with Goldman Sachs serving as lead underwriter and placement agent. The bonds carried an all-in rate of 5.30% and a maturity date of July 1, 2050—creating a 35-year debt obligation intended to be serviced by housing fee revenue over the partnership's 65-year term.

The bond financing defeased $311.5 million in long-term debt from the USG balance sheet and freed up approximately $550 million in credit capacity for future institutional needs:

Approximately 20 financial institutions held the privately placed bonds, with U.S. Bank National Association serving as trustee and collateral agent. The notes were secured by liens and leasehold mortgages on all debtor assets, including the ground leases underlying the student housing facilities at each campus.

Economic Terms of the P3.

The partnership's economic structure placed operating risk on the private partner while reserving revenue control for the public partner:

The debtor did not share in net operating income. After reimbursement of initial capital contributions, all profits flowed to the Board of Regents while the debtor absorbed operating expenses, maintenance costs, and debt service obligations. The BOR collected housing fees directly from students and controlled all pricing decisions, including whether to increase rates to match rising costs.

The private partner bore the economic risk of the partnership's performance while the Board of Regents retained control over housing fees.

Pre-Filing Distress

P3 Economics After Closing.

The operating landscape shifted in the years following the partnership's 2015 closing. When the Board of Regents declined to allow annual increases in student housing fees sufficient to keep pace with market rates and rising operating costs, the debtor absorbed the resulting shortfall. Meanwhile, the BOR's rent—which the debtor owed regardless of financial performance—continued to escalate automatically by 3.0% annually.

The First Day Declaration describes a gap between costs and revenues. The BOR expected the debtor to continue bearing operating losses while the public partner retained all net operating income.

COVID-19 Impact on Student Housing.

The pandemic impacted student housing occupancy nationwide. According to S&P Global Ratings analysis, in-place occupancy fell to 87.2% at core universities by fall 2020—down 4.3 percentage points from the prior year. Prior to the pandemic, student housing occupancy had remained stable at approximately 95% from 2016 through 2019. Fall enrollment decreased 2.5% nationally according to the National Student Clearinghouse, with further declines at institutions that shifted to remote learning.

For Corvias USG, the occupancy declines compounded existing revenue constraints. With the BOR not increasing housing fees and occupancy falling below projections, the USG Student Housing Program began operating at losses.

Industry analysis reported that student housing occupancies declined approximately 3% by May 2021, with two-thirds of universities offering online or hybrid instruction during the 2020-21 academic year.

Five Years of Default and Fee Starvation.

The senior secured notes entered default in 2020. The debtor continued operating during the default period.

• Management fee forfeiture. The debtor forewent its base management fee for all but two months over the subsequent five years. The performance incentive fee—despite being fully earned under partnership terms—was never paid.

• Noteholder cash control. With the notes in default, the Collateral Agent (U.S. Bank National Association) controlled cash revenue flowing through the partnership's operating accounts.

The March 2025 Cash Squeeze.

Beginning in March 2025, the Collateral Agent began holding back a portion of monthly operating expense disbursements. The debtor faced two payment deadlines:

The First Day Declaration states the filing was intended to prevent noteholders from sweeping operating funds if the July 1 interest payment was missed.

Capital Structure at Filing

The debtor's assets consisted of leasehold interests in student housing facilities under ground leases with the Board of Regents. The housing properties were owned by the Board of Regents, and the debtor's operational rights would terminate upon P3 dissolution.

Security package. The notes were secured by liens and leasehold mortgages on all debtor assets, including the ground leases and associated improvements at each campus facility.

Chapter 11 Case Proceedings

Single-Entity Filing.

The bankruptcy pertained only to Corvias Campus Living - USG, LLC—the entity holding the USG partnership assets. No other Corvias entity was included in the proceedings. The parent company and affiliated entities continued operating normally, including Corvias's military housing operations managing 26,000 homes at 13 Army and Air Force installations.

Cash Collateral.

The debtor utilized cash collateral with noteholder consent and court supervision to fund operations throughout the case. No traditional DIP financing was sought.

The court entered a First Interim Cash Collateral Order on June 30, 2025, followed by a second interim order on July 1, 2025. The cash collateral arrangement governed continued operations during the case.

Mediation.

Shortly after filing, the debtor sought appointment of a mediator to facilitate negotiations between the debtor, the Board of Regents, and the noteholder group.

By October 2025, the parties had reached agreement on the framework for a consensual liquidation.

Chapter 11 Plan of Liquidation

The $208.5 Million Sale.

The Combined Disclosure Statement and Plan of Liquidation, filed in October 2025, provided for sale of the entire housing portfolio back to the Board of Regents:

The plan provided for the Board of Regents to assume housing operations at all nine campuses after closing.

Housing transition planning began after the sale agreement was reached. Students at affected campuses received notification that housing contracts would transfer from Corvias to their respective universities by early January 2026. Services including room assignments, resident programming, and maintenance would shift to university control.

Plan Classification and Treatment.

Noteholder recovery analysis. With approximately $205 million in net proceeds available for distribution against $526.7 million in outstanding principal, secured noteholders faced recovery of approximately 39%. The bonds were issued in 2015 with a 5.3% coupon and underwritten by Goldman Sachs.

Administrative and priority claims would be paid in full, consistent with Bankruptcy Code requirements. General unsecured creditors—primarily trade payables estimated at approximately $5.2 million—would receive limited distributions subordinate to the secured noteholder claims.

Equity interests held by Corvias, LLC would be cancelled without distribution, eliminating the parent company's stake in the partnership.

Key Plan Features.

1. Liquidating plan. The plan provided for asset sale and wind-down rather than going-concern reorganization. There was no restructured entity emerging from bankruptcy.

2. P3 termination. The 65-year partnership agreement terminated upon sale closing, 40+ years ahead of its scheduled 2055 expiration.

3. Consensual resolution. The plan was confirmed with support from both the noteholder group and the Board of Regents, avoiding contested confirmation litigation.

4. BOR transition. The Board of Regents assumed direct control of housing operations.

Confirmation.

The Confirmation Order was entered on December 11, 2025, following a combined hearing before Judge Laurie Selber Silverstein. The voting declarations filed prior to confirmation reflected acceptance by the impaired noteholder class.

One limited objection—filed by the Chubb Companies regarding insurance-related provisions—was withdrawn prior to the confirmation hearing after resolution of the insurers' concerns. No other objections were filed.

The case moved from petition (June 25, 2025) to confirmation (December 11, 2025) in about five and a half months.

Key Timeline

Professional Retentions

Debtor's legal team. Morris, Nichols, Arsht & Tunnell LLP served as lead bankruptcy counsel, with the team including Derek C. Abbott, Matthew O. Talmo, Tamara K. Mann, Brenna A. Dolphin, and Brianna N. V. Turner handling various aspects of the case. Holland & Knight LLP served as special corporate counsel for non-bankruptcy matters.

Financial advisory. CohnReznick Advisory LLC provided financial advisory services to the debtor, supporting valuation analysis, sale negotiations, and plan development.

Monthly fee applications tracked professional costs throughout the case, with applications filed through November 2025 documenting work performed during the chapter 11 proceedings.

Student Housing Bond Distress Context

The Corvias USG bankruptcy occurred amid distress in bond-financed student housing projects. According to Moody's analysis cited in the Bond Buyer, student housing accounts for 40% of defaults in the multifamily bond sector despite representing less than 6% of total multifamily loans.

Comparable Project Distress.

The Corvias USG difficulties were not isolated. The UnionWest Project in Orlando—another bond-financed student housing development—was downgraded from Ba1 to Ba3 in December 2025, with fall 2025 occupancy of 68% compared to 94% in fall 2024.

Corvias Parent Insulated

The bankruptcy pertained only to Corvias Campus Living - USG, LLC—the entity established to hold the Georgia partnership assets. No other Corvias entity filed.

Continued Operations.

Corvias's other business lines continued operating:

• Military housing. Corvias Military Living manages approximately 26,000 homes at 13 Army and Air Force installations across the United States. This business line continued operating.

• Other higher education partnerships. Corvias maintains student housing partnerships at other universities outside the USG system. These partnerships continued operating under their respective contractual frameworks.

• Parent company. Corvias Group, LLC—the ultimate parent entity founded by John G. Picerne—did not file for bankruptcy.

Corporate Background.

The Corvias enterprise traces to the Picerne family's multi-generational real estate business. John G. Picerne, who founded the military housing business in 1998 after joining the family's Picerne Real Estate Group in 1982, sought a recession-resistant business model following three real estate downturns.

Campus housing represented a diversification from the military housing core, launched in 2012 under the Corvias Campus Living brand. The name Corvias—meaning "by way of the heart" in Latin—reflected the company's stated mission to improve quality of life for the communities it serves.

The Corvias Foundation, established in 2006, has provided more than $15 million in grants and scholarships, supporting educational opportunities for military families and communities where Corvias operates.

Frequently Asked Questions

What caused the Corvias USG bankruptcy?

The 65-year P3 structure placed operating risk on the private partner while giving the Board of Regents exclusive control over student housing fees. The First Day Declaration states the BOR did not approve rate increases sufficient to match rising costs, and occupancy declined during COVID-19. The debtor reported operating losses, forewent management fees for five years, and faced a $16.9 million interest payment due July 1, 2025. The filing was intended to prevent noteholders from sweeping operating cash if that payment was missed.

How much will noteholders recover?

Noteholders owed approximately $526.7 million on the senior secured notes will receive approximately $205 million from the $208.5 million BOR sale (after deduction of the debtor's $3.5 million wind-down reserve). This represents recovery of roughly 39%, or about 61% below principal, on bonds issued in 2015 with a 5.3% coupon and underwritten by Goldman Sachs.

Who is buying the student housing portfolio?

The Board of Regents of the University System of Georgia is purchasing the assets for $208.5 million. The transition is scheduled for early January 2026.

Did Corvias's other businesses file bankruptcy?

No. Only the USG subsidiary filed for chapter 11 protection. Corvias's military housing operations—managing 26,000 homes at 13 Army and Air Force installations—continued operating normally, as did other higher education partnerships and the parent company.

What campuses were affected by the bankruptcy?

Nine University System of Georgia campuses participated in the P3: Abraham Baldwin Agricultural College, Georgia Southern University Armstrong Campus, College of Coastal Georgia, Columbus State University, Dalton State College, East Georgia State College, Augusta University, Georgia State University, and University of North Georgia. Housing services continued throughout the bankruptcy, with transition to university management in early January 2026.

How long were the notes in default before bankruptcy?

The senior secured notes entered default in 2020, remaining in default for approximately five years before the chapter 11 filing. During this period, the debtor forewent management fees for all but two months.

Is student housing bond distress widespread?

Yes. According to Moody's analysis, student housing accounts for 40% of multifamily bond defaults despite representing only 6% of total multifamily loans.

What happened to students during the bankruptcy?

Housing services continued throughout the chapter 11 case. The cash collateral arrangement with noteholders funded ongoing operations, and the fall 2025 semester proceeded across all nine campuses. The Board of Regents assumed housing management responsibilities by early January 2026.

How did the P3 structure allocate fees and risk?

The P3 structure gave the Board of Regents control over housing fees while the private partner bore operating costs and debt service obligations. The debtor did not share in net operating income; after reimbursement of initial capital contributions, profits flowed to the Board of Regents.

How long did the bankruptcy take from filing to confirmation?

The case moved from petition on June 25, 2025, to confirmation on December 11, 2025—approximately five and a half months. Mediation facilitated agreement among the debtor, noteholders, and Board of Regents.

Who is the claims agent for Corvias Campus Living?

Donlin, Recano & Company, LLC serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

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