Student Housing Business

NOV-DEC 2017

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

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PUBLIC-PRIVATE PARTNERSHIPS 61 November/December 2017 what they're looking for to transform what they're looking for not only through development but operations. Wachalski: The distinction between the revenue generating facilities and non-revenue generating facilities is very critical because with student housing, you can run it off of the revenue from the housing. If you're talking about classroom buildings, it's probably some sort of availability payment. Williams: It depends. If you look at the UMass Amherst project, it looks like a broad spectrum of different product types, but actually they're all auxiliaries. They all have some sort of revenue attached to them. It's identifying how much and what that is that will be the challenge, but they're not just putting in a bunch of non-revenue generating spaces. You can help yourself by adding space that generates revenue into it, obviously. Leonczyk: That can be positive from a credit perspective too. If you have a diversity of revenue streams that are strong in their own ways, as an investor, you start to feel better about your overall demand risk and return. Wachalski: Two follow up questions. Michael [Leonczyk], since you started to talk about the investment, do you arc your equity, so to speak, in other assets outside of student housing? Leonczyk: Absolutely. We are education, healthcare and storage inves- tors, broadly. In education, that has been primarily student housing but we are broadening what that means to the firm and looking at on- campus parking, bookstores, dining, infrastructure, energy and utilities. Generally our model at this point is to find high-quality universities and colleges, and high-quality health systems and invest in assets or pro- grams that are improving the outcomes. That's one of the reasons that we are interested in these multi-use P3s. Our base is certainly student hous- ing and on-campus housing, but our interest is well beyond that. Brinkman: ACC is a publicly traded REIT — you can go to Yahoo Finance, type in 'ACC' and find all the information you want about us. From our standpoint, we're a one-trick pony with student housing. That's not to say that we don't invest in other asset classes, but it has to be predicated on a student housing development. Case in point, we've built 27 parking garages, 10 dining facilities, we own 500,000 square feet of retail across the country. We park our money in places that aren't student housing, but it's always tied to a student housing development. From our standpoint, we always continue to look at it. Are we going to one-off build an academic building? No. Our shareholders and investors wouldn't deem that a prudent use of their funds and the fact is that they invest in us as a student housing REIT. Wachalski: From a development standpoint, how do you guys make a decision whether you want to pursue a project or not? On one hand, these mega-projects are enticing; on the other hand they take substantial resources. How do you assess your own internal capacity? Jones: There are a number of quality P3 opportunities coming down the pipe these days and you have a certain amount of resources and a certain amount of energy and expertise that you can devote to these projects. You have to make qualitative decisions about which ones to invest in. There are a number of criteria that we use, but certainly how likely is the project to go forward is the leader. How likely is the opportunity to build a true win-win partnership with an institution? We've seen some institu- tions that are clearly looking for win-win outcomes, and some institu- tions that are looking more at what we can do for them, and those are the institutions where we have to be a bit more careful. H A R R I S O N S T R E E T Focused Investments in Education, Healthcare & Storage Real Estate Since 2006 we have acquired or developed $8.9 billion * in student housing properties across 130 universities nationwide. As one of the largest private real estate investment firms dedicated to the student housing space, we continue to actively seek acquisition and development opportunities in the U.S. & Europe. * Includes pending transactions through December 2017 W W W.HARRISONST.COM | 312.920.0500 ACTIVELY INVESTING IN STUDENT HOUSING 2017 MARKET ACTIVIT Y 53 Assets | $3.0 Billion * Developments • Acquisitions • Dispositions

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