Student housing company expects to add $150 million to $200 million in assets in 2014
AUSTIN, Texas – Since the start of the new year, Campus Advantage has grown its presence in the student housing industry with the acquisition of five properties that will ultimately benefit pensions serving teachers and employees of city, county and state governments.
The five properties were acquired as part of the company’s core investment strategy and are located in communities experiencing high demand for student housing as many of these properties are already seeing high occupancy rates. These acquisitions add 2,168 total new beds to Campus Advantage’s student housing portfolio.
They are just one part of the growth the company has seen in the past 12 months. In that time, Campus Advantage has added 10 properties and 5,380 beds to its portfolio.
“Our seasoned portfolio of properties, totaling some $220 million in assets, has performed very well for our partners,” said Michael Orsak, Senior Vice President of investments. “Since acquisition, these properties have outperformed their cumulative Proforma NOI by nearly 1 percent. This is something most real estate joint ventures would find hard to say, given many of our acquisitions date back before the recession.”
CEO Mike Peter said he expects many publicly traded student housing companies, such as American Campus Communities (ACC) and EdR, to continue sitting on the sidelines, which will increase the opportunities for private investors such as Campus Advantage to obtain the lion’s share of the business. Because of this, the company expects to acquire $150 million to $200 million in assets in 2014.
“Given how the public markets have reacted to raising interest rates and so-called ‘leasing hiccups’ by our REIT counterparts, our ability to continue to acquire core student housing at attractive cap rates will continue as REITs sit things out until their stocks recover and their implied cap rates come down to a point to where new acquisitions are accretive to cash yield,” he said.
The company’s latest acquisitions bring its student housing portfolio up to 52 properties in 19 states with a total bed count of 25,000. The five properties acquired so far in 2014 include:
– 42North, Tampa, Fla.–The property serves students attending the University of South Florida. The 420-bed community is located a half-mile from campus and features a clubhouse with a fully equipped community room, including an upgraded computer lab and a game room with billiards and ping pong.
– On50, Tampa, Fla.–This 444-bed property also serves students at the University of South Florida and is located on the eastern edge of campus. Amenities include cathedral ceilings and skylights in some units, heated pool, hot tub, sauna and deck and townhome-style units.
– 2040 Lofts, Milwaukee, Wis.–This 612-bed property is located within five blocks of the core of the Marquette University campus. In addition to amenities that include a fireplace lounge, 24-hour fitness center and quiet study rooms on each floor, the property features 2,453 square feet of retail space.
– The Avenue, Indianapolis, Ind.–This property is the third acquisition under Campus Advantage’s second, $75 million joint venture with the California State Teachers’ Retirement System. The 356-bed property serves students at Indiana University-Purdue University Indianapolis.
– Campus Quarters, Corpus Christi, Texas—This community is located just a mile and a half from the campus of Texas A&M University-Corpus Christi. The 336-bed property features a 3,700 square foot clubhouse with fitness area, billiards lounge, video gaming room and private conference room, as well as Wi-Fi access in common areas.
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About Campus Advantage Campus Advantage is an Austin-based real estate firm that offers student housing management, development, acquisition, and consulting services. The company works to create winning partnerships between colleges, universities, investors, developers and owners in an effort to help students achieve their academic and personal goals. For additional information, please visit http://www.campusadv.com.