MIAMI—A joint venture between BMOC (Best Management Onward Campus) and Calidus Holdings has made its first purchase—and it’s a big one. The JV snapped up 2,106 student housing beds at four public universities in Texas, Arkansas, Kansas, and Alabama for $50 million. The transaction marks one of the largest student housing deals in terms of number of beds purchased by a non-REIT in 2013.
The joint venture creates an alliance between a nationwide leader in student housing operations, BMOC, and a premier investor and operator of U.S.-based commercial real estate, Calidus Holdings, with an institutional equity partner. In an effort to take advantage of the pent-up demand for student housing, the joint venture is moving to acquire purpose-built off-campus student housing product, well below replacement cost at four-year public universities nationwide.
”We are not only focused on D-1 markets, but very excited about working with universities, parents, and students in growing D-2 and D-3 markets,” says William J. Levy,BMOC founder, CEO and manager of the day-to-day operations of the new properties. Calidus will provide the asset management services.
According to the JV’s research, there are about 3 million on-campus student housing beds and 4 million purpose built, off-campus student housing beds in the U.S. and over 21 million students. Those stats offers insight into why the purpose-built student housing is a growing market sector.
In addition to the $50 million deal of 2,016 student housing beds that just closed, the venture has an additional five properties under contract comprised of about 3,000 student housing beds in the Southeast. These are scheduled to close in the first quarter of this year. Says Benjamin Shibe Macfarland III, Chief Investment Officer with Calidus Holdings: “We focus tirelessly on harvesting off-market opportunities to acquire assets at great value with consistent cash flow and strong overall yield to our investors.”