Student Housing Business

JUL-AUG 2018

Student Housing Business is the voice of the student housing industry.

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TSB Realty closed on the 152-unit, 742-bed student housing community located near the Indiana University campus in Bloomington, Indiana. TSB Realty closed on the 200-unit, 772-bed student housing community located near the University of Minnesota campus in Minneapolis, Minnesota. Park on Morton Oakbrook Apartments Radius on 15th SOLD The Next In such a structuring, ACC acquires the prop- erty in a blended yield somewhere between a development-level yield and an acquisition- level yield. In this arrangement, ACC assumed the leasing and operating risk and Core Spaces retained the development cost and delivery risk. "We achieved a very attractive yield because we were able to blend some of the presale developments and the stabilized assets," says Talbot. "We did the portfolio as a blended cap rate of 5.4 percent." From Core Spaces' perspective, the ACC sale held opportunity for its own future plans. "The goal was to forge a partnership with a best- in-class group that allowed us to mitigate risk and position our company to achieve growth objectives," says John Weiker, Core Spaces chief investment officer. In portfolio dispositions, ACC sold three assets to Greystar and Gold- man Sachs for $245 million in May 2018. In 2016, ACC sold 19 assets to Saban Capital Group and Campus Advantage for $508 million. "The sale to Saban was us selling the last of our drive properties in our portfolio," says Talbot. Those assets averaged 16 years in age and also averaged over 1.5 miles distance from campus. "As of today, only one asset out of 171 [in 69 markets] is more than one mile from campus, and that particular property is only 1.03 miles from campus. Our median dis- tance to campus is 0.1 mile." Based on the current disparity between public and private valuations, ACC is currently focusing on dispositions and joint ventures over issuing stock to accretively fund future investments. Development remains a top investment priority as well as presale opportunities. Talbot says development returns the highest investment yield and is one of ACC's core competencies. ACC develops between a 6.25 to 6.75 percent yield and is funding that growth by selling assets in the low 4 percent cap rate range, creating " a very accretive capital recy- cling plan," according to Talbot. A unique aspect of ACC's portfolio is that more than 50 percent of the REIT's NOI is coming from assets they, themselves, have developed. Talbot says ACC develops with the mindset of a 30-year hold and signifi- cantly improves material specifications on their developments with that long-term operating period in mind. ACC developed, owns and manages U Club Townhomes at Oxford, which is opening this fall with 132 units, 528 beds. An ACC property's median distance from campus is 0.1 miles. TSB Realty presents the 188-unit, 586-bed student housing community located near the Ohio University campus in Athens, Ohio. TSB Realty presents the 244-unit, 466-bed student housing community located near the Louisiana State University campus in Baton Rouge, Louisiana. TSB Realty presents the 288-unit, 768-bed student housing community located near the Embry-Riddle Aeronautical University, Daytona State College and Bethune-Cookman University campuses in Daytona, Florida. University Courtyard Athens Eagle Landing Apartments Work with the leader in student housing investment sales. SOLD AVAILABLE AVAILABLE AVAILABLE TSB Realty presents the 114-unit, 385-bed student housing community located near the University of Memphis campus in Memphis, Tennessee. TSB Realty presents the 165-unit, 561-bed student housing community located near the University of West Florida campus in Pensacola, Florida. The Nine @ Memphis AVAILABLE AVAILABLE Apartments Oakbrook The Next AVAILABLE PORTFOLIO STRATEGIES July/August 2018 64 WILLIAM TALBOT Executive Vice President and Chief Investment Officer American Campus Communities

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