Student Housing Drawing In National Investors
The sector performs well even in downturns, a fact appreciated by a lot of buyers.
CHAMPAIGN-URBANA, IL—Student housing performs as well or better than any other sector during a downturn, and that continues to draw in national investors like Arrimus Capital. The Newport Beach, CA-based multifamily investment and development company just acquired two new student housing properties.
Arrimus acquired 212 East, a 428-bed property within the University of Illinois’ Campustown district in Champaign-Urbana, IL, from XFD Real Estate Partners for an undisclosed amount. The company also purchased the Prado, a 472-bed mixed-use student housing community located adjacent to the University of Texas in San Antonio, from Fountain Residential Properties. Since 2017, the company has assembled a $290 million student housing portfolio consisting of 3,700 beds across six major universities and four states.
“The two acquisitions offered excellent opportunities to invest in student housing adjacent to major universities that are poised for substantial growth over the next few years,” says Chris Lee, a partner at Arrimus. The University of Illinois in Champaign-Urbana is the flagship school in the UI system and has experienced consistent enrollment growth since 2002, and experts say that will continue. UT San Antonio has made substantial capital investments on campus and is on path to become a Tier 1 research university. Enrollment has grown by 7.4% since 2014 and freshman enrollment set a record in 2017.
The 212 East property is located along Green St. in the heart of Campustown, the center of students’ social life. The area comprises eight city blocks and offers more than 125 dining, retail and entertainment venues. With 428 beds, the 212 East purpose-built student housing property features luxury amenities including a state-of-the-art fitness center, group and private study rooms, a community lounge with billiards and televisions, and an outdoor courtyard with fire pit, grilling areas and hammocks.
The 160-unit Prado is a class A student housing property located at 7114 UTSA Blvd. adjacent to the university and features an onsite coffee house, sandwich shop, Chinese restaurant and barber shop. Major amenities at the community include a clubhouse with a media area, game room, kitchen and study areas, a 24-hour fitness center, business center with study rooms, and a luxury, resort-style pool with a covered entertainment area.
Lee also notes a high demand for off-campus housing at both universities. At the University of Illinois, on-campus housing only provides housing for 19% of students. And 212 East’s location offers access to the university and its sports facilities as well as the area’s many restaurants and entertainment options.
And UT San Antonio offers only five on-campus housing properties which can accommodate only 17% of the student population. The remaining undergraduate and graduate students must find off-campus housing, and the Prado is the only mixed-use student housing community adjacent to the university.
Holliday Finoglio Fowler’s Chicago office represented AXFD in the 212 East transaction. CBRE’s Dallas-based national student housing team represented Fountain Residential in the Prado transaction.