Student Housing Business

SEP-OCT 2018

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

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TIER 2 & 3 MARKETS September/October 2018 StudentHousingBusiness.com 64 the best in a Tier 2 market, there's probably going to be a buyer for that." For many of the larger own- ers in the industry, it is Tier 1 or nothing, so for now, the players in lower-tier markets tend to be smaller national firms or the local and regional investors/owners. "I think Tier 2 and Tier 3 mar- kets are poised for growth for the right kind of investor," says Tim Roth, partner and director of student housing for Springfield, Missouri-based Vecino Group. "I don't think that the more insti- tutional investors have as much excitement about Tier 2 or Tier 3 schools. I feel they are willing to purchase stabilized assets in these markets but not take a risk on development." The Scion Group, which has grown its portfolio by partner- ing with foreign capital investors, is unequivocally drawn to Tier 1 assets. "Tier 1 markets continue to rep- resent the best overall risk-adjust- ed investment opportunities," says Mitchell Smith, chief operat- ing officer for The Scion Group. "Tier 1 universities provide unpar- alleled brand recognition across the globe. While neither Tier 1, Tier 2 or Tier 3 markets are totally immune to market level occupan- cy swings due to new supply, the Tier 1 markets tend to absorb it more efficiently. There are some solid opportunities in Tier 2 and Tier 3 markets, but selectivity is paramount." Filling Demand in Tier 2's Vecino Group is selective about what it undertakes in Tier 2 and Tier 3 markets. Having launched in Springfield, home to Missouri State University, the company is intimately familiar with the mar- ket. Roth was a real estate broker before getting into the develop- ment side of the business, leasing ACTIVELY SEEKING DEVELOPMENT OPPORTUNITIES 1849 Green Bay Road, Suite 400 Highland Park, Illinois 60035 info@pinecrestus.com 847-748-3155 Newark, DE Pittsburgh, PA Boise, ID Knoxville, TN The Vecino Group redeveloped the circa 1911 Woodruff building in Springfield, Missouri, to be Sky Eleven. The property opened in 2015.

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