SOURCE: Campus Advantage

Campus Advantage

August 28, 2014 13:28 ET

Campus Advantage Strategy Turns Campus View Into Industry Success Story, Generates Solid Investment Returns

AUSTIN, TX--(Marketwired - Aug 28, 2014) - Campus Advantage's recent sale of the Campus View student housing community in Columbia, Mo., to Lutz Real Estate Investments marks just one example of Campus Advantage taking an underperforming property and successfully improving operations and delivering significant rates of return for investors, which in this case included retired California schoolteachers.

Campus Advantage originally purchased Campus View in March 2008. It was the third property purchased -- and the first sold -- as part of a joint venture with an affiliate of Heitman LLC. At the time of purchase, the 656-bed property was at 96.2 percent occupancy. Within seven months, Campus Advantage had leased it up to 98 percent occupancy. In fact, since March 2008, Campus Advantage has helped the property achieve an average occupancy of 99.3 percent.

Over the past six years, Campus Advantage's value-add strategy has allowed investors to double the amount of equity originally invested into Campus View.

"Campus View is a perfect example of how we were able to take a property in the competitive Columbia student housing market and make strategic improvements to add value and generate a solid rate of return for investors," Campus Advantage President and CEO Mike Peter said. "This is just one of our success stories. We are following the same strategy with other properties and with all of our investment partners."

Campus Advantage successfully turned the property around by following a value-add strategy that included the following:

  • Secured a master lease with the University of Missouri shortly after purchase, resulting in an increase in master-leased beds at the property, from 37 percent (244 beds) to 66 percent (436 beds)
  • Implemented a $2.8 million capital improvement program to improve amenities and unit interiors, resulting in compounded revenue growth of 73 percent and net operating income (NOI) growth of 154 percent
  • Grew rents, from $246.22 per bed in the 2007/2008 academic year to $443.53, an 80.1 percent increase, in the 2014/2015 academic year

About Campus Advantage
Campus Advantage is an Austin-based real estate firm that offers student housing management, development, acquisition, and consulting services. The company works to create winning partnerships among colleges, universities, investors, developers, and owners in an effort to help students achieve their academic and personal goals. For additional information, please visit http://www.campusadv.com.

About Heitman
Heitman, founded in 1966 and headquartered in Chicago, manages over $31 billion in assets invested directly and indirectly in real estate in North America, Europe, and Asia-Pacific. The firm's clients include institutions, pension plans, endowments and foundations, and individual investors.

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