Student Housing Business

JAN-FEB 2018

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

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47 CAPITAL MARKETS UPDATE January/February 2018 markets seeing a lot of action at present. "Buyers are continuing to place the lowest cap rates on proper- ties that are pedestrian-to-cam- pus," says Repetto. "However, the appetite for value-add prop- erties is increasing significantly. The development of pedestrian student housing properties with top of the market rents leaves a material gap in the rental rates to the non-pedestrian properties. Buyers and equity believe there is an opportunity to acquire these older properties, implement a val- ue-add strategy, increase rents and still provide a value opportunity to students." Repetto says that even tradition- ally core buyers are dipping their feet into the value-add arena, with owners like Core Spaces, Universi- ty Student Living and RISE acquir- ing value-add properties over the past two years. 2018 Ramping Up At present, there aren't a lot of deals at play in the market. Instead, right now it's BOV (bro- ker's opinion of value) season. Investment sales professionals are busy evaluating properties for cli- ents interested in bringing them to the market later in the year. Janu- ary and February are somewhat "hangover" months for the indus- try when deals that went under contract during the fourth quarter close. "What's on the market now is holdover from last year that will close in January and February," says Epp. "There is very little that comes to the market this time of year. Communities are in the mid- dle of lease-up to get the num- bers up before they bring them to market. Once properties are 80 percent pre-leased or more and you are able to show strong rents and can show a trend that you are going to be full in the fall, it's time to head to market." The fourth quarter of 2017 was a busy selling season for brokers, and as a result, they are busy into the first quarter of 2018. "There were a great number of properties marketed during the fall and we have a few deals that will close in the first quarter of 2018. We believe there are numer- ous projects following a similar timeline. Separately, there will be a number of properties that were marketed that will not reach financial closing, but nothing of material to note," says Repetto of TSB Realty. A few buyers are sitting on the sidelines, preferring to wait for the right deal to come at the right time. Buying a student housing property, say buyers, is a lot dif- ferent than it was several years ago. "A good number of those who have been active in the sec- tor for the past few years have been cautiously watching, look- ing back at the good old days of just 24 months ago," says Andrew Stark, principal with Timberline Real Estate Investments. "Pricing has gotten very competitive and working a transaction does take drive and tenacity." "We don't rely on opportunities to be brought to us," says Lewittes of The Scion Group. "We spend a lot of time thinking strategically about where we want to deploy capital. We are very focused on the Tier 1 markets. We know TSB Realty closed on the 144-unit, 480-bed student housing community located near the University of North Carolina at Charlotte campus. Aspen Charlotte SOLD TSB Realty presents the 216-unit, 763-bed student housing community located northeast of the University of Mississippi campus. Highland Square AVAILABLE Work with the leader in student housing investment sales. AVAILABLE TSB Realty presents the 201-unit, 636-bed student housing community located just steps from the Coastal Carolina University campus. Coastal Club tsbrealty.com AUSTIN REPETTO Principal, TSB Realty CHRIS EPP Principal, Four Point Student Housing

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