Student Housing Business

MAR-APR 2015

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

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MARKET LEADER MARCH/APRIL 2015 STUDENT HOUSING BUSINESS .COM 74 A A few years ago, we started noticing that the same person was always in the front row at InterFace Student Housing. We noticed that this woman, while modest and polite, would take copious notes and often ask questions of the speakers after pan- els. We would also see her at other events, from time to time. We also noted that the speakers, par- ticularly presidents of the largest student housing companies, were eager to speak to her. After the second year of this, our journalistic curiosity got the best of us and we asked one of the presidents, "Who is that woman?" We were told that she is Jeanne Stosser, a builder of student housing from Blacksburg, Virginia. Not only has she built student hous- ing around Virginia Tech, she owns a large number of the student housing properties close to campus. Through her companies, SAS Builders and CMG Leasing, she owns and manages more than 1,500 rental units in Blacksburg, Christiansburg and nearby Radford accounting for 3,500 beds. When we got to know Stosser, we found out why the presidents of many of the companies were so enamored of her. She is a true rags-to- riches story, who built her portfolio by acquir- ing, renovating and building properties, and smartly protecting them from competition. From her background as a residential broker, she has built a portfolio of real estate — com- mercial and residential — in Southwestern Virginia. She is a pioneer, not only in student housing, but also in real estate, succeeding as a single mother and entrepreneur in a time when many women did not work. She is not afraid to take chances, as she did when she knocked down a 197-bed project she had owned since 1993 to build a state-of-the-art student housing project that is the closest off- campus housing to the Virginia Tech campus. Moreover, you can easily see how she and her family became successful; when talking to her you know you are being treated the same way she would treat a company president or a per- son on the street. SHB: How did you get started in real estate, and how did that lead to student housing? Stosser: I backed into the student housing business by virtue of going through a divorce. I have been a resi- dential real estate broker since the 1970s and started by investing in single- family homes with my then-husband. In the early 1980s, we divorced and those assets were divided. So, in 1984, I started over with pretty much nothing. I had the opportunity to acquire a piece of land that joins the Virginia Tech campus near Green Street. It was being sold by the Virginia Tech Foundation at auc- tion; they had been given the property and were liquidating it. I bought the property and had no idea how to pay for it. I found that I could build seven townhomes on it. I went to the bank with the idea, and discovered that you could actually fnance the project with complete loan-to-value. I was able to acquire the property and build an income-producing asset with no cash in the deal. That was in 1984 and I became very interested in the stu- dent housing product at that time. SHB: Where did you take your company from there? Stosser: We really did not start developing large multifamily properties until the early 1990s. We have a construction division as well as a single-family real estate develop- ment company and brokerage; that is how we originally started. We also have the rental management company, CMG Leasing. One of my sons, Scott, joined me in 1990 to build single-family housing. He originally went to work for friends of mine in that business to learn the trade and construction. In order to keep him busy and give him something to do, I would buy the land and go through the development process of what we were going to put on it. He would build the houses and I would sell them. That is how we started SAS Construction Company, now known as SAS Builders. In 1993, my son Jeff, a University of Kentucky graduate, joined our property man- agement division. As we grew the company in the 1990s through acquisition, renovation and building, we had to add staff. For many years, I did not have a staff. We continued to build student housing near the campus wherever we could fnd land in a good location. I did my own accounting and everything until I had about 75 rental units when I hired my frst employee, Sheila, who is still with me. In 1997, I hired Joann Craig as controller when we had about 850 units. Today, she is technically our CFO but wears many different hats and handles a lot of business in the company. She is an integral part of our continued success. SHB: Tell us about the newest property in your portfolio, The Edge. You've held that property for a long time, right? Stosser: In 1993, I had the opportunity to acquire 197 units in Blacksburg called Oakbridge. This was a project that was built in late 1950s. At the time it was built, it was not in town limits and later annexed into Blacksburg. It was across the street from the Virginia Tech campus. The apartments were on nine-month leases. Virginia Tech Foundation sold the property to a partnership that built three large complexes in Blacksburg. The price they paid for the 14.8 acres was $30,000. When I came along, the property was in trouble because it had been pledged as collateral for another deal. We were able to acquire it at public auction, renovated it, and restructured 12-month leases. For many years it was a nice income-producing asset, but it was showing its age. Recently, we tore it down and replaced it with a new property, The Edge. The Edge has 913 beds and it is the frst purpose-built student housing develop- ment in Blacksburg. The Edge is also the frst property we are leasing by the bedroom. We had the frst phase completed in August 2014 JEANNE STOSSER MARKET BUILDER Jeanne Stosser started with a handful of assets 30 years ago. Today, she controls a majority of the off-campus housing market around Virginia Tech. Interview by Randall Shearin and Richard Kelley

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