The Beacon

Location: Auburn, Alabama

University: Auburn University

The Challenge

Campus Advantage acquired Eagles on South College in November 2015 — a student housing asset located in Auburn, Alabama, near Auburn University. The property had recently gone through a repositioning and was 98% occupied at the time of acquisition. Per the sale, Eagles on South College needed a new name and brand in the market.

The Solution

The acquisition strategy consisted of completing the renovation, focusing on the common area amenities, and curing deferred capital that the seller could not identify a dollar-for-dollar return upon. Campus Advantage saw the opportunity in capitalizing on the hard work of the unit renovations performed by the prior owner and finishing the product off with a new look/name and refreshed amenity base to provide a stable cash flow and steady value appreciation.

Campus Advantage enlisted the help of Catalyst, their marketing partner, to assist in the rebranding of the newly acquired asset. In the Auburn market, many competitors have names involving the school mascots (tiger or eagle) in their name; therefore, Catalyst opted to not pursue that route as a means to stand out from those properties. The Beacon was chosen as a guiding light for residents to find their path, something that aligns very heavily with the Campus Advantage Students First® residence life program. To reintroduce the property to the Auburn market, Catalyst created a new sales sheet, a brochure, a paper system, social media graphics, a website, and a reveal campaign.

The Results

Throughout the hold period, the property has maintained in excess of 98.0% occupancy, achieving 4.3% compounded rent growth after an initial Year 1 growth rate of 11.1%. Currently, the project is held for long-term investment with a projected 10-year internal rate of return (IRR) of 15.1% versus the pro forma of 11.5%.

• Role: General Partner in JV Partnership with Institutional Investor
• Configuration: Two, Three, and Four Bedrooms
• Acquisition Date: November 2015
• Loan-to-Cost: 60% (new loan)
• Current Book Value: $33.8 million
• Projected Sale Date: October 2025
• MOIC though sale: 3.0x (unrealized)
• Project/Unrealized IRR: 14.29%
• Project/Unrealized MOIC: 2.83x

 

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