Student Housing Business

SEP-OCT 2018

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

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THE SHB INTERVIE W September/October 2018 32 faculty condominiums with them and we've done a few other proj- ects with them. SHB: A lot has changed in the 60 years since Campus Apartments started, and really a lot has changed in the past 10 years. Where do you see the industry now versus 10 years ago? Are all the changes for the better? Adelman: When I used to go to real estate conferences in the 1990s, you'd have the multifam- ily, office and retail people sitting at tables. They wouldn't let me sit at their tables because I was a student housing person. No one had heard of student housing as an investment asset class; it was the real estate that no one wanted to deal with. I spent a lot of time trying to speak up about student housing and what, exactly, it was. The majority of the changes that have happened have been good. College students are getting better, safer and higher quality student housing. Universities are happier to see that there are more respon- sible owner/operators out there creating safer environments for students. Most off-campus opera- tors used to be very mom-and-pop and there was generally a lack of sophistication. In 1996, we did the first CMBS student housing loan in the country. It was unheard of before then. SHB: Where is Campus Apartments right now? You have had more of a focus on new devel- opment over the past few years. Where do you see the investment market as well, as you look for acquisitions? Adelman: Our sweet spot is really new development and value-add redevelopment of existing assets. Our latest fund is really half and half of that mix. We delivered four new projects this year: one at Penn, one at the University of Tennessee, and two in Ann Arbor, Michigan. It was a big year for us. We also want to be in a position, as a vertically integrated operator, where we can do value-add acqui- sitions and that we can have some other asset classes in our proper- ties. We like having retail on the ground floor in urban markets. We developed a hotel a few years ago here in Philadelphia near the Penn campus. We want to be able to solve for a problem, and the answer isn't always student hous- ing. You will see us have differ- ent sleeves of capital for different strategies now. SHB: Can you expand on that? How are you raising capital? Adelman: We operate like many others in the business through a series of funds. Similar to many in the business, our investors are much like any traditional private equity fund. We have pension funds, endowments and sovereign wealth funds. In our current fund, which is on Morgan Stanley's pri- vate bank platform, if you are a high net worth individual you can invest in our fund. I like that our investor base is diversified. I'm involved in another business called FS Investments, which man- ages about $25 billion in credit funds. That's mostly made up of corporate credit debt. I get a per- spective from that of what insti- tutions are thinking through the different cycles of the economy. As we continue the investment strat- egy at Campus Apartments, you will see us continue in the value- add space and you may see us do some separate projects for institu- tional clients who have a specific niche strategy within the student housing sector. You may also see us do a fund with a different strat- egy for student housing. SHB: What is your development pipeline like? Adelman: We just finished four projects for 2018, which is a lot for us. For 2019, we have no projects opening. For 2020, we have a few EXPERIENCE NEXT LEVEL LIVING... STUDENT HOUSING FURNITURE, PERFECTED. Focus + Design // Manufacture + Build // Deliver + Install // Refresh + Service FUNCTION FIRST FURNITURE 615.864.7461

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