Completed last summer, College Row at Franklin & Marshall University in Lancaster, PA has 393
beds in 117 units. The $37-million project is a development of Campus Apartments, which constructed it under a long-term ground lease with the college.
nity at the University at North Carolina at
Greensboro—last fall. It is now fully occupied and has a waiting list. The firm is working on a second property, a 528-bed asset in
Carbondale, IL called the Reserve at Saluki
Pointe. Located near Southern Illinois
University, the complex is 80% preleased
for the fall. The executive reveals that the
firm currently has four additional developments in various stages of due diligence.
The success of the sector has attracted a
host of new entrants, as well as investors
looking to partner with existing developers
and operators. Adelman relates that more
groups have entered the business in the past
three years, but they’re soon realizing that
“if you’re not a good operator, you’re not
going to be here very long.” That’s where
joint ventures come into play, he says.
Campus Apartments currently has a
partnership with GIC Real Estate Pte. Ltd.,
the real estate investment arm of the
Government of Singapore Investment
Corp., to develop and acquire more than $1
billion in properties across the country. The
deal reportedly made the firm the largest
privately held student housing company in
the country. According to Adelman, over
the past 18 months, the JV has deployed
about $450 million.
While EDR has done acquisitions with
institutions, it has yet to move forward with
a development JV. However, says
Trubiana, “There is indeed increased interest from institutional investors to folks who
may have been involved in multifamily
development and the like, so clearly, there’s
more competition coming into the arena.”
Stinger, too, maintains that the level of
interest from potential partners has risen,
along with the competition. “I think this
segment is finally being recognized as an
institutional-grade investment. It’s not a
novelty anymore. The returns are very
handsome,” he says, adding that JPI targets
minimum 20% IRRs on its projects.
Because the segment is unlike traditional
multifamily, he continues, there is a greater
potential to increase rents—an attractive
prospect for any investor. “With student
housing, you’re turning the property over
100% every year, so we have quite a good
opportunity to push rents and enhance the
marketing efforts,” Stinger explains.
“Whereas in a conventional deal, you’re
turning over 5% to 10% of your property
each month. This is a more well-defined
leasing period.”
And though competition is high, there’s a
plethora of locations to tap into when it
comes to building a new project. Those
involved in the business contend that the
current stock of student housing was built so
36 REALESTATEFORUM MAY 2008
