Student Housing Business

MAY-JUN 2018

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

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COMPANY PROFILE May/June 2018 44 A After launching student housing developer Nelson Brothers from his apartment in 2007, Patrick Nelson and his brother Brian went on to build the company into one of the largest 25 student housing owners in the country. "It was a terrible time to start a commer- cial real estate company," Patrick Nelson says. "But because we strategically chose student housing, we weathered the Great Recession and grew from there." The company grew to more than 35 prop- erties, managing more than $900 million in assets. According to Patrick, the company grew 3,000 percent from 2013 to 2016 and ranked number 129 in fastest growing compa- nies in the Inc. 500. Starting as a buyer, the company went on to form development, management and con- struction businesses under its banner. Brian focused on raising capital, while Patrick focused on the operating businesses. In April, the company announced it would split into two entities, with Brian retaining half the com- pany's assets. Patrick will form a new com- pany, Nelson Partners, to build a new student housing platform. His goal: to develop and buy $2 billion to $3 billion in properties over the next few years. Brian Nelson will also rebrand his company under a new name, NB Capital Partners. The reason for the split? Patrick says the strategies and specialties that the two brothers have developed over the years are now differ- entiated enough that it makes sense to divide into two companies. "I love it all — from buying ugly, run down properties and turning them around to beau- tiful Class A real estate. My passion is for ground-up development and designing new properties as well as core income produc- ing acquisitions. I thrive on that. We're large enough now that we can split and still both maintain large enough entities to have signifi- cant presence and platforms in the industry." The brothers split the Nelson Brothers' port- folio based on their individual preferences. Nelson Partners will start with its share of the assets as its base, and grow through a combination of development and acquisitions. Patrick also retains the student housing prop- erty management company, and it will man- age the Nelson Partners and Nelson Brothers portfolios. Nelson Partners is retaining the construction arm of Nelson Brothers as well. Nelson Partners also owns about 10 par- cels of land for future student housing development, primarily near universities in the Mountain States and on the West Coast. Patrick Nelson estimates that the properties represent $350 million to $400 million worth of development opportunities; he plans to devel- op two to three of the sites per year. The first two properties to be developed are at Utah State University in Murray and the University of Northern Colorado in Greeley. The compa- ny will also acquire value-add properties and redevelop them into more robust assets. "I want to be a well-balanced student hous- ing company," says Patrick Nelson. "From rehab to new build and management, we want to be focused and build a strong platform." Nelson Partners will have a nation- wide scope, though it prefers projects in the Mountain States and other western states to stay within a close flight time to its base in Orange County, California. The company has projects in Mississippi, West Virginia, Colorado, Washington, Arizona, Oregon, Montana, Texas, Utah and California. Patrick Moving Forward Patrick Nelson creates Nelson Partners to focus on development and value-add projects. By Randall Shearin " We're large enough now that we can split and still both maintain large enough entities to have significant presence and platforms in the industry. — Patrick Nelson, Founder, Nelson Partners Nelson Partners owns and manages Auraria Lofts in Denver

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