Commercial Investment Real Estate March/April 2016 | Page 25

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-
March | April | 2016
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
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