Student Housing Business is the voice of the student housing industry.
Issue link: https://studenthousingbusiness.epubxp.com/i/564824
THE SHB INTERVIE W JULY/AUGUST 2015 STUDENT HOUSING BUSINESS .COM 76 ship cultivation as we focus on larger and more strategic transactions in our continued growth. Scion's senior team is very collaborative and extremely nimble. My primary areas of respon- sibility include managing our capital relation- ships and capital raising activities as well as our investments and acquisitions. I also focus on our overall strategic and business planning. Rob [Bronstein], Eric [Bronstein, executive vice president] and I spend a great deal of time on strategy as both the sector and key initiatives of some of its major participants continue to shift. We try to be very thoughtful about identi- fying opportunities that make sense for us and our partners, and pursue those that are accre- tive to our business plan and portfolio. In addi- tion, I am responsible for our asset manage- ment activities, which is an increasingly central focus given the size of our portfolio. We are a very data-centric company and razor focused on our portfolio performance. We dynamically benchmark the operating and fnancial per- formance across our properties as well as the broader sector. This steady fow of information helps us to spot trends and opportunities on an ongoing basis. SHB: Scion has bought a number of beds over the last three or four years. How have you absorbed all those so quickly? What changes has it caused the organization to make? Lewittes: As we have grown, Scion has always been very deliberate in our ongoing invest- ment of both human and capital resources in our operating platform. As you know, the business is very operationally intensive, and we believe that our focus and standards, and the operating bar we have set for ourselves, has really informed how we take advantage of opportunities for growth. Under the strong leadership of Mitchell Smith, we have been able to optimize our operating platform and structure it in a way that supports, empowers and drives the performance of our properties. As we continue to grow, we have successfully leveraged our organizational model and taken advantage of its scalability by thoughtfully adding resources and ensuring that we never get ahead of ourselves from an acquisitions standpoint, relative to our ability to integrate and perform at the level to which we are com- mitted. I would say it has worked out quite well. As we've grown larger, with the beneft of consistent and strong operating performance, we have attracted signifcant investor inter- est. With enhanced capital access comes the opportunity to be that much more aggressive in deploying capital. For us, what that means is no longer looking to compete in the 'single or doubles' market. In order to move our needle, both we and our capital partners recognize the need to seek chunky, multi-property port- folio investments, where we can signifcantly grow our asset platform and deploy meaning- ful amounts of capital. We are trying to take advantage of what we believe are very attrac- tive sector fundamentals and the opportunity for signifcant consolidation. I think that what helps us succeed is our focus and speed; we are a very agile organization. Naturally, you need to have the capital access, but the most impor- tant thing for us, is our reputation and commit- ment to doing what we say we are going to do. We pride ourselves on being a frst class, highly efcient and trustworthy counterparty to any seller. We are thorough, and quick, and I'd like to think that we are also smart and tough, but fair at the same time. We recognize that deals get done when they make sense for both sides. We are also committed to making sure that for us, as long-term players and consolidators in the sector, and typically transacting — often repeatedly — with counterparties that are also major participants in the sector, success is as much about cultivating relationships as it is about prevailing in any single transaction process. SHB: Scion enjoys a positive reputation in the industry; you are known by many in the industry as a company who closes what you want to acquire. How have you cultivated that reputation? Lewittes: First of all, I appreciate you saying that because, as you can imagine, our reputa- tion is extremely important to us and we work very hard to make sure that the experience any third parties have in dealing with us is favor- able. I would say it is everything from doing what we say we are going to do, to maintaining a solutions-oriented and professional approach at all points along the transaction process. We work hard to cultivate the right kinds of strate- gic relationships with the other major industry participants, and try to get a real understand- ing of their near and longer term objectives. We want to be there as strategic counterparts that can help them achieve their goals. We under- stand that it's not necessarily about the last dollar or contract point in any one deal, rather, we defne success as our ability to continue to attractively and proftably grow our portfolio, consolidate the sector and stay ahead of the competition. SHB: What are Scion's plans for the next few years and, down that path, what's the strategy that you're taking? You've got a lot of initia- tives, going from acquisitions, to moving into Canada, to working with colleges and univer- sities. How do you divide those strategies, and what attention do you pay to each? Lewittes: Our plates are kind of full, but we're very focused. We are all about student hous- ing all of the time, so there is no distraction by ideas outside of the sector. I would say that the fundamental and highest organizational priorities would be our continued growth and investment, and the ability to pursue meaning- ful opportunities as the sector continuously evolves. We are very bullish on the funda- mentals, and believe this continues to be a very attractive investment climate for student housing. There has been a nice convergence in our ability to enhance our operating and fnan- cial performance as we've grown larger, and we believe we will continue to beneft from increased scale. While we are always interested and ready to learn from the activities and ini- tiatives of others, we are committed to what we do, and constantly challenge ourselves to capitalize on changes we are seeing across the industry. For example, we have observed some recent strategic shifts in some of the other play- ers as a result of either fnancial pressures, a tendency to follow the lead of the major REITs or in response to changes in capital fows. I think we're heading into yet another chapter in the ongoing maturation and evolution of the sector which will likely be accompanied by higher interest rates, and will have an impact on the type of activity we see unfold. Canada represents an interesting opportunity for Scion. Our advisory platform has enabled us to build strong relationships with major universities in the U.S. and internationally, especially Canada, where we have advised twelve universities and recently opened an ofce. The Canadian student housing sector lags the U.S. in size and maturity, but the higher educational system in Canada is diferent as well, thereby resulting in investment opportunities which are diferent West 20 (formerly The Estates) near the University of Florida was acquired by Scion in May. Woodlands of Columbia near the University of South Carolina. Scion acquired the property in January.