Commercial Investment Real Estate is the magazine of the CCIM Institute, the leading provider of commercial real estate education. CIRE covers market trends, current developments, and business strategies within the commercial real estate field.
Issue link: http://cire.epubxp.com/i/649656
23 March | April | 2016 land owners. One owner said that he had been waiting for a development like ours to launch, so he could justify his ef orts to start a revitalization of the area for the properties he owns." Purpose-Built Housing In some cases, universities have become involved in build- ing of -campus student housing through private/public partnerships to accommodate the growth of their student populations. In Waterloo, Ontario, two well-regarded uni- versities — the University of Waterloo and Wilfrid Laurier University — have evolved from a lodging program focused on safety for students in the early 2000s to a mixed use of retail and resort-like student housing buildings in the last f ve years. As a land-locked campus, Wilfrid Laurier has actively partici- pated in local real estate through land assemblies, single lot pur- chases, and development of a portfolio of of -campus housing. With a larger campus footprint, University of Waterloo has been actively engaged in leasing student housing. "In Waterloo, investors have a full spectrum of student housing," says Mike Milovick, CCIM, BBA, broker at Royal LePage Grand Valley Realty in Waterloo. "My role is to work with dif erent types of investors. Since 2003, I've seen the landscape of student housing change from primarily mom-and-pop ventures to substantial inter- est from REITs and institutional investors in the upscale mixed-use student accommodations." During this transformation, he has facilitated replacing older homes built from 1910 to 1960 with both utilitarian and high-rise mixed-use buildings for students. T e closer the properties are to the campuses, the higher the rents charged and the more amenities of ered, according to Milovick. "Waterloo has more purpose-built student housing than the rest of Canada combined," he says. During the last 15 years, substantial boosts in enrollment at both universities, especially from international countries and out-of-prov- ince students, have driven both the expansion in student housing and the desire for improved amenities. "I continually monitor enrollment for signals on how the proceed- ing rental season will occur," says Milovick, who is the landlord of a student housing property. Right now, he sees the best balance in student accommodations in the last 15 years, with price per unit ranging from CA$49,000 for a low-end residential conversion to CA$80,000 for new purpose-built housing . Recession-Proof Investment During the Great Recession, enrollment in most U.S. universities, including graduate schools, skyrocketed, serving as a safety net until the job market stabilized. During the past decade in Fayette- I International and af uent students are pushing the envelope on amenity- rich housing on college campuses, helping to transform communi- ties across the U.S. and Canada. While the funding for leasing students' one bedroom-one bath accommodations usually comes from wealthy parents, increasingly private equity funds, institutional inves- tors, and real estate investment trusts fund these developments. T eir interest is upping the property prices and the volume of deals while driving down capitalization rates. And some of the big players are taking prof ts and moving on. For example, Inven- Trust Properties in Oakbrook, Ill., recently sold its University House portfolio of nearly 13,000 beds, for $1.4 billion to a joint venture of the Scion Group in Chicago, the Canadian Pension Plan Investment Board, and GIC, Singapore's sovereign wealth fund. T is sale ref ects the ongoing evolution of student hous- ing from a disparate industry populated with mom-and-pop investors into one dominated by commercial real estate heavy hitters. Yet this property niche still provides opportunities for CCIM brokers, develop- ers, and investors located near college towns. "T is is Manhattan-style living for stu- dents," says Rene Nelson, CCIM, real estate investment broker at Pacwest Commercial Real Estate in Eugene, Ore. "I would live there amid 10,000 amenities." Nelson facilitated a land purchase transformation with Core Campus near the University of Oregon in Eugene to build a 12-story, 508-bed student housing complex called the Hub, which opened in 2015. "T is student housing project has spurred local growth and new development," she says. "When I was making the deal with the buyers, we met with several key business deci- sion makers and adjacent Nirian/Thinkstock