42North

Student Housing Case Study: 42North

Location: Tampa, FL

University: University of South Florida

Campus Advantage acquired 42North, a 420-bed student housing property, in 2014 after third-party managing the asset for one year.

With a short-term business plan to inject capital into an older property in an effort to increase its value in the University of South Florida market, Campus Advantage identified and executed a value-add investment strategy including:

  • Infusing capital to cure deferred maintenance
  • Repainting the exterior and reroofing all buildings
  • Improving the IT infrastructure, including installing new fiber lines and wireless Internet infrastructure and rebuilding the cable infrastructure
  • Upgrading unit interiors with new bedroom furniture and appliances
  • Adding and improving amenities, including new fitness center equipment, a clubhouse revamp, and adding a hammock garden and dog park

To increase lead traffic to the office and website, Campus Advantage worked with marketing partner, Catalyst, to establish an integrated marketing approach including elements such as a themed move-in and resident appreciation campaign to deepen residents’ connection to the property, early and consistent renewal campaigns targeting residents, and integrated (online/offline) media campaigns to attract new leases.

With these strategies, in addition to maintaining and operating the property to meet the company’s high standards, Campus Advantage increased 42North’s net operating income by 25.8% in 36 months. In alignment with its plan, Campus Advantage closed the sale of the property in May 2017, with its involvement in renovations resulting in a significant increase in property value.

 

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The Verge Orlando

Student Housing Case Study: The Verge Orlando

Location: Orlando, FL

University: University of Central Florida

Campus Advantage acquired The Edge in Orlando, Florida in March 2016. Campus Advantage
immediately implemented a value-add strategy to reposition the asset as a luxury student housing community. This plan included refreshing the brand, creating a new look and feel, updating the amenity package, and upgrading all apartment units.

Catalyst, Campus Advantage’s affiliated marketing firm, worked with the on-site team to rebrand the property with a vibe the student audience could relate to. The property was well-liked by residents and the community, so Catalyst selected the name, The Verge, as a nod to the community’s past. Catalyst also created a new logo, color palette, marketing materials, and promotional items. The new brand was essential to repositioning the community in the market. A VIP pool party successfully revealed the new brand, created buzz in the marketplace, and generated new leads.

Campus Advantage crafted an extensive capital improvement plan designed to exceed students’ growing expectations. Capital improvements in the common areas included a new pavilion grilling area and an outdoor kitchen by the pool, LED lighting, new walkways, doggie waste stations, roof work, upgraded HVAC units, a hammock garden, and a fire pit. The pool deck was resurfaced and features updated pool furniture. The community is now gated, and all amenities require an electronic key to enter. Residential unit improvements included wood-style flooring, black appliances, LED lighting fixtures, ceiling fans, granite countertops, new plumbing fixtures in the kitchen and bathroom, laminate countertops in the bathrooms, 42” TVs, and more. In addition, the IT infrastructure was upgraded with new wireless radios throughout and increased bandwidth, providing much quicker speeds and wireless access to all residents.

Current residents and UCF students appreciated the refreshed brand and property improvements. The Verge achieved 100% occupancy and 9% rental rate growth in fall 2016 before all capital improvements were in place, and achieved and additional 12% rental rate growth and 100% occupancy in fall 2017. Residents are proud to call The Verge home, as evidenced by the 30% increase in resident satisfaction with the accommodations.

MOVE-IN 2016

Student Housing Case Study: MOVE-IN 2016

Each year, Campus Advantage employees submit ideas and vote on a theme to use portfolio-wide for move-in season. 2016’s theme drew inspiration from the colorful, upbeat atmosphere of music festivals.

Catalyst created a variety of pieces to build excitement for Move-In Fest 2016, as well as to help assist people moving in at each property. Collateral included a logo and branding for the campaign, door hangers, lanyards, a banner, table tents, stake signs, emails, landing pages, a concert T-shirt, a Snapchat filter, social media graphics, and a ticket-shaped fast pass. In addition to these pieces, Catalyst worked with Campus Advantage’s Students First® team to create an “autograph book” to be used throughout the year at the properties. Throughout the year, different events would result in students earning signatures in their autograph book, providing added engagement at each community. Messaging centered around the excitement and anticipation of music festivals, with phrases such as “It’s Your Time — Live it Up!”, “Skip the Lines!”, and “Pack Your Bags!”

Russia

Student Housing Case Study: Russia

Opening a New Campus in the Russian Far East

Campus Advantage provided four years of consulting services for a new university campus in the Russian Far East. The project was a high-profile initiative of the Ministry of Education to create a world-class institution based on western design and operating standards. Several of Campus Advantage’s team members spent six months living and working at the campus in 2014.

The campus is located on Russian Island near the port city of Vladivostok, next to the border of China on the Sea of Japan. Fall classes commenced in September 2013 with approximately 25,000 students. CA’s work focused on four main areas: residence life programming, on-campus housing management, international marketing, and summer camps and conferences.

Campus Advantage was first invited to assist with the project in 2010 by the builder of the $7 billion project, who was based in Moscow. During visits to Moscow, CA had the opportunity to meet with several high-ranking leaders in the Russian federal government who were educated in the United States and Western Europe. These individuals were very interested in replicating the feel and atmosphere of western campuses at the new university in Vladivostok with the goal of attracting international students and faculty.

The campus includes over 12,000 beds of new housing. A team of architects from Moscow and the United States worked together with CA’s consulting group to design and plan the unit mix, common areas, and amenity spaces throughout the residence halls. This was the first new university built in Russia in many years, and the goal was to incorporate a true residential experience based on western traditional campuses.

Campus Advantage’s time in Russia was carefully designed to provide the university with tools that would assist their goals of raising their QS World University Ranking and becoming a world-class institution. The consulting team worked closely with university staff to provide training, policies, and procedures. One of the most exciting tasks accomplished was the development and implementation of the first Resident Assistant program in the country. With help from higher education marketing agency Catalyst, Campus Advantage developed recruiting concepts and materials that led to hundreds of students applying and interviewing to be chosen for the program.

Campus Advantage shared policies and procedures to help the campus create a roommate-matching program and customer-service-based management practices. CA also recommended special programs to assist international students and further advised on methods to increase access for students with disabilities. By putting a summer-turn plan in place, CA provided the university with the necessary tools to handle students moving in and out over a short period of time.

Working closely with Catalyst, CA was able to present the concept of a campus mascot and a university merchandise program. A faculty committee and student organization reviewed several mascot concepts and designs, along with a business plan for launching university spirit-wear and other branded products.

The work Campus Advantage conducted at Far Eastern Federal University provided them with the tools necessary to increase their QS World University Ranking — as well as ShanghaiRanking’s Academic Ranking of World Universities and the Times Higher Education World University Rankings — and was very well received by both the Russian federal government and the university. CA worked with Erik Holm-Olsen at the U.S. Consulate in Vladivostok, who stated, “Campus Advantage, from everything I have seen, has been an excellent representative of the American private sector in Vladivostok.”

A sampling of accomplishments:

  • Introduced residence life programming to the FEFU campus
  • Created a mascot and a university merchandise program
  • Implemented world-class standards for residence hall management
  • Provided multiple opportunities to expand conference business at FEFU
  • Hosted several events on campus for students, allowing the FEFU staff and students to interact socially
  • Designed furniture and décor for leisure areas in the building

Fort Collins, CO and Charlotte, NC

Student Housing Case Study: Fort Collins, CO and Charlotte, NC

Due Diligence

Campus Advantage performed due diligence on two potential acquisitions in Fort Collins, Colorado and Charlotte, North Carolina in June 2016. Campus Advantage’s approach to the due diligence process included the following components.

 

Lease Audit

Campus Advantage meticulously examined each lease file and guarantor agreement for all current and future residents who pre-leased for the upcoming year. The data documented on the lease files was compared to the rent roll to ensure a proper calculation of the properties’ revenue. During the process, student demographics were also noted to better assess the student base at the properties, as well as to aid in the development of future marketing campaigns. The team also recorded concessions to confirm assumptions made in the underwriting of the properties. Campus Advantage discovered numerous missing lease files, and the investor was able to negotiate a guaranty with the seller. Incorrect concessions and rent premiums were also identified during the audit and brought to the attention of the investor.

 

Property Inspection

Both properties underwent a physical inspection, including all units and common area spaces. All damages were noted and compiled into the report to produce capital expenditure projections. Campus Advantage found construction punch items that were skipped and landscaping projects that were deferred, allowing the investor to negotiate the completion of these projects before purchasing the assets. The CA facilities team also identified future Wi-Fi upgrades that needed to be added into the five-year capital plan.

 

Market Analysis

The Campus Advantage team thoroughly analyzed the Fort Collins and Charlotte markets to assess the properties’ positions in the markets and confirm revenue assumptions made in the underwriting. Team members also consulted a variety of primary and secondary sources to compile a complete pipeline of future student housing development in both markets. Developments not released to the public yet were identified, allowing the investor to make changes to their underwriting to factor in the additional supply.

 

After all the data was compiled and analyzed, Campus Advantage recommended that the investor move forward with purchasing both acquisition opportunities. The investor closed on the Fort Collins property in December 2016.

 

Client endorsement:

“Campus Advantage completed two due diligence reports for [Company] in the summer of 2016: Charlotte, NC and Fort Collins, CO. They provided us with valuable information in regard to the properties’ overall physical condition, lease file audit, and supplied us with detailed information on various items that needed to be addressed during the due diligence period. Campus Advantage also supplemented the due diligence reports with a market analysis. These analyses gave us a full overview of the universities’ enrollment, current competitive market, and pipeline, which helped us with our decision in acquiring the assets. Campus Advantage was given a short window to deliver these reports, and both were delivered to us on time. They were also available to us whenever any follow-up items needed to be addressed. Their work is greatly appreciated!”

The Luxx

Student Housing Case Study: San Antonio, TX

Market Analysis and Feasibility Study

Campus Advantage was engaged by a private developer to perform a market analysis and feasibility study for a new development near the University of Texas at San Antonio (UTSA). Campus Advantage evaluated the on- and off-campus housing market, analyzed historical enrollment trends and future growth at the university, and conducted informal interviews with students to determine the potential demand for a new student housing development. Campus Advantage discovered that UTSA was transitioning from a regional school, serving mostly commuter students, into a major university that recruits students from across the state and abroad. In 2002, their total enrollment was 22,016, of which 62% originated from Bexar County, where the campus is located. Fall 2015 had a total enrollment of 28,787, a 31% increase. Bexar County residents dropped to 47% of the population, and students coming from other counties in Texas increased over 83%, accounting for an additional 6,000 students. International students, as well as out-of-state students, almost doubled as well.

Campus Advantage’s analysis included the following:

Market:

  • An overview of competitive properties in the market
  • A rate analysis of competitive properties
  • An overview of new developments in the pipeline

 

University:

  • Enrollment trends
  • Enrollment projections
  • An overview and rates for on-campus residence halls/apartments

 

New Development:

  • An analysis of the proposed site location
  • Rate recommendations
  • Amenity recommendations
  • Operational recommendations
  • Marketing and leasing recommendations
  • Proposed unit layouts
  • An absorption analysis

 

As a result of the study, Campus Advantage concluded that the San Antonio student market could absorb the proposed project given its excellent location, the lack of a freshman live-on requirement, and the relatively few number of on- and off-campus beds. Campus Advantage knew the market would be very competitive since all nine of the off-campus student housing properties were newer product and offered desirable amenity packages, so extra focus was placed on the unit layouts and unique amenities, including a two-story fitness center and Vegas-style pool area. These amenities made the development stand out from the competition and created a strong level of interest with the students. The property, with 690 beds, opened at 94% occupancy in fall 2014, while the rest of the market averaged 89.6% occupancy. Since the desired occupancy was not achieved in the initial lease-up, the developer hired Campus Advantage to manage the property in May 2015.

Plymouth, NY

Student Housing Case Study: Plymouth, NY

Operational Assessment

Campus Advantage was engaged by the owner/operator of a portfolio of properties serving Plymouth State University. The owner’s goal was to sell the assets and retire, but they knew they needed to improve operations and increase occupancy before finding a prospective buyer, so they hired Campus Advantage to perform an operational assessment. In order to provide operational recommendations, the Campus Advantage team interviewed the site staff, toured the properties, conducted student intercept surveys, reviewed historical documents, and surveyed the market. Operational data and budgets provided by the owner were reviewed to create a comparative budget using industry benchmarks to illustrate the variances versus an average portfolio of this size. Campus Advantage primarily focused on identifying ways to streamline operations to increase efficiency. Furthermore, the team offered suggestions to strengthen the portfolio brand as the properties were located throughout the town at multiple locations and did not have a uniform style.

Campus Advantage’s assessment included the following:

Market Factors:

  • An overview of competitive properties in the market
  • A rate comparison to market averages
  • Enrollment trends for Plymouth State University

 

Marketing and Leasing:

  • Branding recommendations
  • Recommendations on tiered incentives for renewals
  • By-the-bed, individual leasing implementation
  • Website review and recommendations
  • Strategies to track effectiveness of marketing tools

 

Facilities:

  • Recommendations on additional amenities and outdoor features
  • Recommendations on audio/video features in the leasing office
  • Preventative maintenance schedule to focus on sustainability

 

Operations:

  • Additional training recommendations
  • Staffing/job duties assessment
  • Recommendations on management systems and accounting procedures

Residence Life:

  • Event schedule implementation
  • Advisement on campus relations

 

After providing the initial operations assessment, Campus Advantage was subsequently engaged to provide operations consulting to assist with the implementation of the recommendations. During Campus Advantage’s consulting engagement, the portfolio reached pre-leasing goals at a record rate and was 100% pre-leased by February for an August move-in. The owner was then able to successfully sell all of the assets within the portfolio.

Morgantown, WV

Student Housing Case Study: Morgantown, WV

Operational Assessment

In January 2016, Campus Advantage was engaged to provide an operational assessment along with ongoing marketing and leasing support for a student housing complex in Morgantown, West Virginia. This unique, two-part, 1,312-bed complex is composed of an apartment section and a traditional residence hall. The complex was newly constructed but opened with very low occupancy, so the owners needed a third-party perspective on how to improve marketing, leasing, operations, and resident retention. In order to provide operational recommendations, the Campus Advantage team interviewed the site staff, toured the properties, conducted student intercept surveys, evaluated operating procedures, reviewed historical documents, and surveyed the market. Operational data and budgets provided by the owners were analyzed and compared to industry standards to identify excessive expense variances.

The operational assessment was provided to the owners with recommendations primarily focused on achieving higher occupancy. The owners hired Campus Advantage as a leasing consultant to assist with tackling the leasing obstacles and achieving the occupancy goal.

A sampling of Campus Advantage’s recommended improvements:

Marketing and Leasing:

  • Refreshed the property branding and marketing materials
  • Differentiated the identity of the apartments and the residence hall
  • Relocated the leasing office and increased organization
  • Relocated the model unit
  • Revamped the model unit aesthetics
  • Increased social media usage
  • Revised the rate structure
  • Implemented a renewal campaign
  • Revised the website to promote both communities

 

Facilities:

  • Revised staffing structure
  • Made capital expenditure recommendations
  • Implemented a unit inspection schedule
  • Made improvements to the Wi-Fi network and amenities

 

Operations:

  • Implemented a resident satisfaction survey
  • Implemented a parking permit structure
  • Made staffing and training recommendations
  • Implemented new policies and procedures to increase efficiency

 

Residence Life:

  • Made co-vending recommendations
  • Recommended event and programming ideas
  • Made programming promotion and social media recommendations

 

After implementing Campus Advantage’s recommendations and utilizing the CA consulting team to assist with the marketing and leasing efforts, the residence hall’s occupancy increased 44%, and the apartment occupancy increased 31% from August 2015 to August 2016.

Spring Campaign 2016

Student Housing Case Study: Spring Campaign 2016

The 2016 Spring Campaign was a portfolio-wide integrated marketing campaign conducted across 25 Campus Advantage properties. Each property hosted a major event strategically designed to attract college students before the end of the semester while simultaneously reminding residents why they love living at a Campus Advantage community.

Catalyst created three main themes: Pool Party, Fiesta, and Barbecue. To keep emails clear and simple, each party theme had a designated weekend for the event. For example, properties hosting a Pool Party had their event on April 23, the Barbecue Party took place on April 30, and Fiestas were celebrated on May 7 (coinciding with Cinco de Mayo).

Each property received a poster, a flyer, a social media cover photo, social graphics, a 30-second promotional video, three emails, and a landing page. To encourage attendance, Campus Advantage offered a Summer Vacation Giveaway, which included round-trip airfare, hotel, and transportation/food allowances for the winner. To enter the sweepstakes, all you had to do was attend an event and provide your information. Across all properties, 935 students attended events and were entered into the giveaway.