HOUSTON—Student housing property, Campus Vue, comprised of 145 units within two five-story buildings, is located at 4459 N. MacGregor Way. It is less than a block from the University of Houston, a tier 1 school with more than 42,000 students. The property is the only off-campus housing option adjacent to the university and was voted best off-campus apartments in 2016 by the university's students.
Newport Beach-based multifamily investor/developer Arrimus Capital has acquired Campus Vue from Fountain Residential Properties. Arrimus purchased the 465-bed student housing property for an undisclosed amount. The transaction was led by Arrimus partners Ray Wirta, Chris Lee and Ryan Gahagan.
“We have been bullish on investing in Texas over the long term. It's dynamic economy is driving job growth and its MSAs generally have strong fundamentals to support long-term capital appreciation,” Gahagan tells GlobeSt.com. “Specific to Houston, we have been interested in this multifamily market since early 2016. We viewed Houston from a contrarian perspective and liked the opportunity to enter the market while the energy sector was depressed. Houston was also listed in the Milken Report as one of the biggest decliners, mostly due to the downturn in oil and gas. Moreover, we were/are aware of the new multifamily supply coming online in 2016 and 2017 and lower rental growth forecasts. Taken together, we believed the softer market would provide relatively higher cap rates with an opportunity to create value as the market improved over time. We pursued several multifamily deals around the Galleria, but were outbid. We continue to be interested in the Houston multifamily market, but our focus has shifted to student housing since this initiative has gained significant momentum.”
Campus Vue features fully furnished units with finishes including granite countertops, pendant lighting, stainless steel appliances, and washers and dryers in every unit. Community amenities include a spacious game room, fifth-floor outdoor deck with views of Houston, large study lounges with conference rooms, and a pool and courtyard area. The property is currently 96% occupied.
According to Lee, Campus Vue offered “outstanding fundamentals and was a missed opportunity for a strategic REIT buyer. We were able to solve some operational challenges to obtain an attractive valuation, and are forecasting superior risk-adjusted returns without taking into consideration a potential phase two development opportunity. Campus Vue is a very high-quality property that would be a flagship asset in any REIT portfolio.”
Lee added that a few off-campus student housing projects are in the development pipeline, but none are adjacent to the university. Only 50% of freshmen and 19% of all undergraduates currently live on campus, leaving the remaining student population to find off-campus housing.
Campus Vue is a certified green property through Fannie Mae's Green Globes program, which incentivizes environmentally sustainable multifamily investments. The Green Globes rating system is administered by the Green Building Initiative, a nonprofit organization dedicated to accelerating the adoption of green building best practices.
“Student housing investments are tied to the fundamentals of individual universities, so traditional market analysis is less relevant,” Gahagan tells GlobeSt.com. “As a result, we are somewhat agnostic with respect to the markets we target. That said, when we were shown the Campus Vue deal, we realized it was a great opportunity to buy a newly constructed, core student housing asset in Houston at an attractive cap rate compared to multifamily cap rates around the Galleria. Frankly, we felt it would go to one of the REIT buyers, but due to some operational issues, they backed out and we won the deal. We also solved the issues. Campus Vue is an incredible asset. It's the premier student housing property at UH in terms of quality and its amenity package. It's also the only housing option adjacent to campus. The market dynamics are particularly attractive. UH has become a full-time university and experienced consistent enrollment growth, which is expected to continue for years to come.”
Jaclyn Fitts and Casey Schaefer, both with CBRE's national student housing team in Dallas, represented both Arrimus and Fountain Residential Partners in the transaction.
Earlier this year, Arrimus acquired the 1,044-bed Forum at Denton Station student housing property in Denton. Wirta, Lee and Gahagan, Arrimus have closed more than $100 million in student housing properties in the last 90 days.
HOUSTON—Student housing property, Campus Vue, comprised of 145 units within two five-story buildings, is located at 4459 N. MacGregor Way. It is less than a block from the University of Houston, a tier 1 school with more than 42,000 students. The property is the only off-campus housing option adjacent to the university and was voted best off-campus apartments in 2016 by the university's students.
Newport Beach-based multifamily investor/developer Arrimus Capital has acquired Campus Vue from Fountain Residential Properties. Arrimus purchased the 465-bed student housing property for an undisclosed amount. The transaction was led by Arrimus partners Ray Wirta, Chris Lee and Ryan Gahagan.
“We have been bullish on investing in Texas over the long term. It's dynamic economy is driving job growth and its MSAs generally have strong fundamentals to support long-term capital appreciation,” Gahagan tells GlobeSt.com. “Specific to Houston, we have been interested in this multifamily market since early 2016. We viewed Houston from a contrarian perspective and liked the opportunity to enter the market while the energy sector was depressed. Houston was also listed in the Milken Report as one of the biggest decliners, mostly due to the downturn in oil and gas. Moreover, we were/are aware of the new multifamily supply coming online in 2016 and 2017 and lower rental growth forecasts. Taken together, we believed the softer market would provide relatively higher cap rates with an opportunity to create value as the market improved over time. We pursued several multifamily deals around the Galleria, but were outbid. We continue to be interested in the Houston multifamily market, but our focus has shifted to student housing since this initiative has gained significant momentum.”
Campus Vue features fully furnished units with finishes including granite countertops, pendant lighting, stainless steel appliances, and washers and dryers in every unit. Community amenities include a spacious game room, fifth-floor outdoor deck with views of Houston, large study lounges with conference rooms, and a pool and courtyard area. The property is currently 96% occupied.
According to Lee, Campus Vue offered “outstanding fundamentals and was a missed opportunity for a strategic REIT buyer. We were able to solve some operational challenges to obtain an attractive valuation, and are forecasting superior risk-adjusted returns without taking into consideration a potential phase two development opportunity. Campus Vue is a very high-quality property that would be a flagship asset in any REIT portfolio.”
Lee added that a few off-campus student housing projects are in the development pipeline, but none are adjacent to the university. Only 50% of freshmen and 19% of all undergraduates currently live on campus, leaving the remaining student population to find off-campus housing.
Campus Vue is a certified green property through
“Student housing investments are tied to the fundamentals of individual universities, so traditional market analysis is less relevant,” Gahagan tells GlobeSt.com. “As a result, we are somewhat agnostic with respect to the markets we target. That said, when we were shown the Campus Vue deal, we realized it was a great opportunity to buy a newly constructed, core student housing asset in Houston at an attractive cap rate compared to multifamily cap rates around the Galleria. Frankly, we felt it would go to one of the REIT buyers, but due to some operational issues, they backed out and we won the deal. We also solved the issues. Campus Vue is an incredible asset. It's the premier student housing property at UH in terms of quality and its amenity package. It's also the only housing option adjacent to campus. The market dynamics are particularly attractive. UH has become a full-time university and experienced consistent enrollment growth, which is expected to continue for years to come.”
Jaclyn Fitts and Casey Schaefer, both with CBRE's national student housing team in Dallas, represented both Arrimus and Fountain Residential Partners in the transaction.
Earlier this year, Arrimus acquired the 1,044-bed Forum at Denton Station student housing property in Denton. Wirta, Lee and Gahagan, Arrimus have closed more than $100 million in student housing properties in the last 90 days.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.