Student Housing Business is the voice of the student housing industry.
Issue link: https://studenthousingbusiness.epubxp.com/i/488341
SHB INTERVIE W MARCH/APRIL 2015 STUDENT HOUSING BUSINESS .COM 66 S SHB recently spoke with JJ Smith, chief operating offcer of Chicago-based CA Student Living. The company, a subsidiary of CA Ventures, has nine student projects it is readying for fall 2015 open- ing, and more under development for 2016 and 2017. The company made news earlier this year when it acquired six entitled-for-development sites from Campus Crest Communities. CA Student Living is already under development with a num- ber of those sites. As one of the top developers right now in the sector, we wanted to fnd out how CA is managing its many development projects. SHB: Tell us a little about the history of CA Ventures, from its time as a different company, why/how that changed and why the focus is different now? How are you organized with CA Student Living? Smith: We were founded a decade ago by Tom Scott as Campus Acquisitions. CA Student Living, a subsidiary of parent CA Ventures, has acquired over 4,000 beds (from 2003 to 2007) and developed another 12,000 beds (2008 to present) in student housing markets across the United States. The name change last year better correlated with our development focus — no longer just 'acquisitions' — as we have developed about 30 properties since 2008 representing $2.5 billion in value creation. We've also expanded into other asset types like multifamily, seniors housing, hospitality and offce, which made our 'campus' name less relevant. CA Student Living is a verti- cally integrated investment, development and property management company dedicated to creating premier housing destinations for resi- dents to live, study and play. SHB: You have a lot of development in the pipeline now — all at one time. Why is now the right time for that? Smith: We really believe there's a short win- dow of opportunity to develop these projects, given current interest rates and cap rate cli- mate. Interest rates, we can assume, are going to rise and compress the spread between cap rates and going in return on cost. We believe right now that we've got an opportunity to seize the ideal fnancial climate we're in. We've also built the infrastructure to sustain the growth of this pipeline. Our organization is really built right now to develop between eight and 10 projects per year and we're con- tinuing to fnd, what we believe, are the best opportunities in these markets. SHB: There are other people who will just as passionately indicate now is the time to invest, and not take the risk on development. What's your take on buying versus building in today's climate? Smith: Right now, we're certainly built for development but we're also gear- ing up to own the assets long term that we're developing as well as acquire other core assets from oth- ers and have built a best-in-class man- agement and leasing organization. Both are the case here in that we have an opportunity to not only develop, but JJ SMITH Chief Operating Offcer CA Student Living CA is developing HERE Apartments near the University of Illinois in Champaign. The project contains 593 beds; the building is 27 stories and comprised of two-story apartments. With nine new projects opening this fall, CA Living's chief operating offcer, JJ Smith, has his hands full and his eyes on a lot of moving parts. Interview by Randall Shearin and Richard Kelley DEVELOPMENT FOCUS