Student Housing Business

JUL-AUG 2018

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

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Page 66 of 104

PORTFOLIO STRATEGIES July/August 2018 66 Campus Advantage (SHB #6 Top 25 Owner) Institutional capital has been the engine for Campus Advantage's growth for the past 11 years. Founded in 2003, Campus Advantage spent its first four years gaining strength as a man- agement company. In 2007, the company part- nered with CalSTRS, the second largest public pension fund in the United States, to place $100 million of capital. A few deals were completed before the recession, and the remainder was placed by 2011. In January 2013, Campus Advantage signed a joint venture with another pension plan for $150 million. That plan was not named, but Michael Orsak, senior vice president of invest- ments, says it is one of the top three largest pension plans in the United States. At the same time, CalSTRS re-upped for another $75 mil- lion, and Campus Advantage went on a buy- ing spree. For the 24 months that made up 2013 and 2014, Campus Advantage acquired over $410 million in student housing assets. In 2016, the company sold the 10-property portfolio of assets it owned with CalSTRS. In November 2016, Campus Advantage took a break from pension fund investors, buying the aforementioned 19-property portfolio from ACC with Saban Capital, the family-run office of a high-net-worth individual. Then in May 2018, Campus Advantage acquired six properties (1,910 beds) for $260 million with a top pension plan, bringing the total assets acquired with the plan to more than $700 million. "Aside from the portfolio we bought with Saban, all of our acquisitions have been through our programmatic joint venture relationships with two of the three largest pension plans in the United States," says Orsak. "I believe we were the first student housing operator with a programmatic joint venture with a large pen- sion plan prior to and immediately following the recession." Orsak says pension plans may have been a tertiary investor in student housing by invest- ing in multifamily funds that could have acquired a student housing property or two, but they weren't investing directly in student housing. Campus Advantage likes pension funds because, given their institutional nature, they're typically more logic-oriented in invest- ing, Orsak says. "With pension plans you get a lot of rope to go out and find the right deals and present the opportunities you like." This allows for flexibility and the opportunity to target core and value-add portfolios. Generally speaking, Orsak explains, large pension plans are looking toward student housing as a diversification factor to their allocation to multifamily providing potential down-side protection and slightly incremental yield. "Therefore, we generally target large, name-brand university markets where our capture ratio of the off-campus demand is less than 5 percent. This ensures proper geographic diversification of a portfolio." Campus Advantage is not looking at acquir- The Armstrong, formerly known as Burbank Commons, serves Louisiana State University. Campus Advantage acquired the 532-bed property from ACC in November 2016. More Than Brokers. With our growing footprint across the US, Colliers International Student Housing Group is pleased to team with in-house service teams specializing in: Brokerage Appraisal Debt Origination Equity Placement Market Research Demand Studies DOROTHY JACKMAN +1 727 298 5337 JAMIE SWICK +1 813 605 5599 SEAN BAIRD +1 727 450 6158 JONATHAN HOLT +1 813 221 2290 To learn more about our services call a member of our team:

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