Student Housing Business

JAN-FEB 2017

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

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COMPANY PROFILE StudentHousingBusiness.com January/February 2017 67 Education Properties. This year, a partnership between the firms acquired a 576-bed community near Purdue University in West Lafayette, Indiana, called The Lodge, marking TH's second investment in the sector. "TH Real Estate is an attractive partner for an owner or develop- er because of the stability, depth and breadth of our platform, and the expertise of our team," says Schwaab. "We're very committed to the space, and expect to be a relevant investor over the next several years." Along with the firm's JV invest- ment at Purdue University, TH acquired properties in Texas, California, Michigan, North Carolina and South Carolina over the past year. Recently acquired properties include BLVD63, a 1,379-bed community located near San Diego State University in California; Greene Crossing, a 726-bed property located pedes- trian to the University of South Carolina in Columbia; and 33º North, a 427-bed community adja- cent to the University of North Texas in Denton. TH Real Estate wants to further its investment in the sector over the next few years for a variety of reasons. "The demographic- driven enrollment activity in stu- dent housing is going to remain attractive for quite some time," says Schwaab. "That feeds the demand for student housing — schools typically can't keep up with it, particularly on the public side where resources are some- times more scarce or directed into academic needs. Fundamentals are good, as is pricing. With cap rates in the mid-5 to 6 percent range, we like the higher-income component that comes along with investing in both multifamily and student housing." Schwaab adds that the reces- sion-resistant qualities of the sec- tor are also a draw for an invest- ment portfolio. "We see how enrollments behave during eco- nomic downturns, and that can provide a benefit to a portfolio for an investor," he says. "We're also cognizant of how enroll- ment behaves during recoveries, so that's why we're very selec- tive with what university markets we invest in. During the recover- ies, we're also seeing enrollment growth — at least at our target schools." Though Schwaab touts the ben- efits of student housing proper- ties in a commercial real estate portfolio, he doesn't see student housing becoming the lead invest- ment for an institutional firm. "It is a niche sector, and I think that's the view for most investors," he says. "It is a great component for an overall portfolio." "It all comes back to the cash flow and how student housing properties behave at different points during the cycle," Schwaab continues. "When everything else is slowing down during an eco- nomic downturn, student housing will hold up, and I think that's the benefit to a portfolio." As the sector continues to show strong fundamentals and return on investment, Schwaab believes it to be the right time for new investors to enter the market. "There's enough liquidity in the space, and that's healthy for the sector. At the same time, I think there are still opportunities to pro- vide capital and consolidate, and to take advantage of the newness of the sector," he says. "Student housing is at a point where it's new enough, but also mature enough, that it's a really good time for investors to come in," Schwaab says. "I also think it's an exciting asset class deal- ing with universities, tomorrow's workforce and all of the activ- ity that universities bring to the economy. It's an interesting sector to be in, and we look forward to continuing our investment in the space." SHB MIKE SCHWAAB Senior Director, TH Real Estate One. How many IT vendors does it take to run your MDU? Fiber • Security TV • Access Control Low Voltage • WiFi Let the experts handle your technology. Call today and leave the rest to us. 734.222.6061 Advertise in STUDENT HOUSING BUSINESS ® Rich Kelley | 914-468-0818 rkelley@francemediainc.com Andrew Johnson | 404-832-8262 ajohnson@francemediainc.com Contact

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