Student Housing Business

SEP-OCT 2018

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

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INVESTMENT SALES September/October 2018 StudentHousingBusiness.com 52 MULTI-FAMILY MULTI-FAMILY MULTI-FAMILY MULTI-FAMILY SPECIALISTS DEDICATED TO SPECIALISTS DEDICATED TO SPECIALISTS DEDICATED TO SPECIALISTS DEDICATED TO ON-TIME DELIVERY! ON-TIME DELIVERY! ON-TIME DELIVERY! ON-TIME DELIVERY! ON-TIME DELIVERY! ON-TIME DELIVERY! ON-TIME DELIVERY! ON-TIME DELIVERY! RELATIONSHIPS I COLLABORATION I RESULTS CONSTRUCTION ENTERPRISES, INC. 2179 Edward Curd Lane, Suite 100 Franklin TN 37067 Phone: 615-332-8880 www.construc� onenterprises.com a path to improvement because of the projected enrollment growth at Texas A&M University. "These investors feel that they can get a good value for their money right now, then ride the market as it upswings," says Fitts. Distressed assets have also begun to appear on the market in college towns that have occu- pancy issues, either through declines in univer- sity enrollments or oversupply in the market. Norman, Oklahoma, and Oxford, Mississippi, are oversupplied markets due to new proj- ects coming online in recent years. Columbia, Missouri, meanwhile, has seen an enrollment decline in recent years, caused by the aftermath of protests on campus in 2015. In Columbia and other markets where enrollment has dipped, foreclosures and REO properties are hitting the market in small numbers, creating some oppor- tunities for contrarian buyers, say brokers. According to ARA's Mid-Year Student Housing Market Overview, which covered transactions through the second quarter, approximately 50 percent of sellers were private owners; 28 per- cent of sellers were institutional owners; and 20 percent were REITs. The large portfolio sales in 2015, 2016 and 2017 somewhat overshadowed smaller sales activity that took place. However, in 2018, many investment brokers say that the industry hasn't slowed down. ARA predicts that there will be more deals placed in the market during fourth quarter 2018 versus fourth quarter 2017. "It is going to be a huge fourth quarter," pre- dicts Lang. ARA reports that sales volume through the second quarter was $4 billion, ahead of the $3.9 billion at the same time in 2017. And those numbers will be boosted when the EdR/Grey- star buyout is added to the rolls. However, even removing that $4.6 billion transaction, the industry should have a strong year. Many investment sales executives are predicting the year's volume will end up about the same as or higher than 2018, but the velocity will be stron- ger since deals are smaller. "Q4 will be big based on a few large portfo- lios in escrow [now] and a few recapitalizations that we expect to close before year end," says Bradley. "I think we will be in a similar position to last year, but possibly with more volume in 2018." SHB " Q4 will be big based on a few large portfolios in escrow [now] and a few recapitalizations that we expect to close before year end. I think we will be in a similar position to last year, but possibly with more volume in 2018. — Tim Bradley, Principal of TSB Realty and Founder of TSB Capital Advisors

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