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 34 projects that will be lined up. We were so focused on 2018 that we didn't do a great job launching anything for 2019; we were really all hands on deck for the 2018 deliveries. Four projects is a lot for us to do at once. Also, we are not merchant developers — we build and hold — so we want to make sure what we build is quality. SHB: You don't sell a lot. Why? Adelman: Over 60 years in our Philadelphia/Penn portfolio we've sold three assets. The way I was raised in the business is to own real estate for a long time and pay down your debt; the appre- ciation will take care of itself. We have a unique situation with our Philadelphia portfolio where we own entire city blocks, and often square blocks. We are getting to the stage where we are looking to recycle some of that land where we have smaller scale projects into some larger developments. Even with our joint ventures, we rarely sell the properties to exit. With our joint venture with GIC [gov- ernment of Singapore], when it matured at 10 years, we bought them out and kept the properties. We've been pretty fortunate in that we don't have any partners; we own all our assets ourselves. Whereas a lot of larger develop- ers syndicate deals or JV, we have wholly owned assets and those done in a private equity model. Because of that, we don't have this trader mentality that proper- ties have to be sold after a set hold period. SHB: With a 60-year-old com- pany, it can be difficult to main- tain or change the culture. What is the culture like at Campus Apartments and how, as the CEO, do you spend time molding that? Adelman: It really starts with our people. If you look at our senior officers, they have been here for a long time. Dan Bernstein, our president, has been here 23 years. He has been through the transi- tion of Campus Apartments from a small regional player to a nation- al player. He was here when we had a family business mentality and helped lead us to the envi- ronment that we have today. The average tenure of our executive team is greater than 15 years. We have carefully created a culture where everyone is approachable. We don't want our employees to be afraid to tell us bad news. We also try to treat our employees like family, borrowing from our roots. As we hit our 60th anniversary, I am really appreciative of the team we've built here. I'm especially appreciative of how hard our peo- ple work and how invested they are in what we are doing here. To be the biggest was never our goal, but I'm proud of the fact that we've built a business where we own all of our assets and created a very stable company. The future is bright for Campus Apartments in that regard. SHB: How many employees do you have? Adelman: We have about 600 people around the country. That number was close to 900 a few years. We made a conscious deci- sion about three years ago to exit the third-party management business. Because we were such a large owner, we felt our own assets were suffering because we were spending so much time wor- rying about our third-party assets. We just felt there was a lot of fee compression happening in the third-party business and a race to the bottom among competitors in the space, with no offense meant to any operator. We also found that some of our clients were try- ing to learn off our knowledge then taking over and managing the property themselves. It didn't make sense to continue to support that kind of model. SHB: Are you finding colleges and universities more open than ever to the public-private partnership model? Adelman: The fact that more and more are getting done makes it easier for someone who works for a university to recognize that it is acceptable to look at the structure as a possibility. There are certain times where you have university officials who want to keep their arms around a project themselves; they don't want an outside firm. SHB: The Greystar/EdR merger has been a big topic of discussion recently. What are your feelings about the transaction? What do you think it means for the sector? Adelman: Randy Churchey did a great job maximizing shareholder value with that transaction. There was a mismatch of what people were viewing EdR's assets to be worth versus the stock price. It was very unselfish of the EdR team to do such a transaction. As a pub- lic entity, they should treat share- holders properly and reward them A Classic In Today's Changing Student Housing Market -ACQUISITION - REPOSITION - MANAGMENT- SPECIALIZED BUT NATIONAL LOCAL BUT ALL ENCOMPASSING 214.636.8466 While Campus Apartments has operated student housing in the University Center area of Philadelphia for 60 years, its first ground-up development in the area, The Simon at Founders Row, opened this fall.

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