MUNCIE, IN-Woodlark Capital LLC has purchased the Forest Oaks Apartments, located one mile from Ball State University, for $8.4 million. The 136-unit, posh apartment complex, built in 1998, consists of 10 two-story apartment buildings and a clubhouse/leasing office.

Woodlark, a tenant-in-common investor, focuses on off-campus student housing and military housing in secondary and tertiary markets. Sean O'Brien, chief operating officer, tells GlobeSt.com that this purchase fit well in line with the company goals. "This is a great property, and even has a bus line that runs right in front of it that is free to students," O'Brien says.

He says the former owner's lender had a restriction that only 10% of the property could be rented to students. "When you dig in a little further, you find that comparable student housing properties are getting a premium to the rent they were getting at Forest Oaks," O'Brien says. "We figure, on a transitional basis, that we'll rent more to students, and try to bring our rents up to the line fetched at other properties. Even if we don't, it's a 94% occupied property, and very well managed by the Sterling Group." Rent at the complex is between $600 and $830 per month.

He says it's a common misconception that student housing is a risky investment. In fact, he says, college towns produce the best rental markets. "Colleges and universities, like the government tend to grow even in a recession," O'Brien says. "More and more kids are going to college, and unemployment in college towns tends to be lower." Ball State has about 20,000 students, but only has about resident complexes for 7,000, Woodlark officials say.

O'Brien says it's much better than, if hypothetically, a large number of renters related to the same company are renting in your location and it went under. "Then you could be in trouble," he says. These are Interesting words, considering BorgWarner, Muncie's largest employer, announced this month that it's shutting down the town's plant, leaving 700 jobless by April 2009.