Student Housing Update: Where’s the Activity?

Student Housing Update: Where’s the Activity?

8.19.2015

For developers and property managers, the phrase “back to school” means a deadline to put the finishing touches on a new property and an opportunity to start the school year with fully leased properties.  Here’s what we’re seeing as students head back to campus this fall.

National

campus-housingStudent housing is beginning to be seen as a mainstream property type and a solid investment for REITs, but not enough properties are stabilized and on the market from the latest wave of development, according to National Real Estate Investor.  REITs are raising capital to invest in student housing, and they should begin acquiring properties over the next few years, says JLL Capital Markets. Some owners, like American Campus Communities and Education Realty Trust, are continuing to develop and plan to acquire new buildings later.

Chicago

Logo-CrainsHarrison Street Real Estate Capital recently acquired the 771- bed Dwight Lofts dormitory in the South Loop for $105 million, according to Crain’s. The building at 642 S. Clark St. is entirely leased to Columbia College Chicago through 2026. This is the third purchase of a major student housing building in the city this year. Student housing in Chicago remains a renters market, even though rents in the city’s downtown are rising.

St. Louis

Landmark Properties and Sangita are contributing to the redevelopment of downtown St. Louis with the opening of their new high-end student apartment building, The Standard. The 465-room tower is more than 99% leased, with amenities like granite countertops, stainless steel appliances, a fitness center, a club room and a coffee bar. The building is geared towards St. Louis University students, who will pay $800 to $1100 per room to live in units with one to five bedrooms.

Glassboro, New Jersey

20150808_inq_jrowan08-bRowan University students will have another option for housing this fall as the new 316,000 SF mixed-use building at 220 Rowan Blvd opened its doors recently, according to philly.com. The building, developed by Nexus Properties, contains 60 market-rate apartments and will also house 450 students.  The $74 million structure includes 20,000 SF of retail and 27,000 SF of medical space.

Auburn, Alabama

Students at Auburn University may have a new place to live soon, as CA Student Living announced plans to develop a 126- unit, 456-bed mixed-use building called the Jackson near campus. Student Housing Business reports that the development  will replace the Center Court Apartments, which will be demolished, and will include a pool, bike parking and parking garage.

Investment Friday: Where’s the Money Going?

Investment Friday: Where’s the Money Going?

Brooklyn-Whale

Industrial to office? Why not?

Madison Realty Capital is buying a seven-story, 400,000-square-foot industrial property in Brooklyn with plans to covert it to a creative/tech office space. This repurposing of space is going on in markets across the country, as investors find that an old industrial or office building might be better suited for high tech space or hotel use, for example. The Brooklyn Whale Building buy– for $82.5 million– is one to watch. Click here for more.

 

Where are Global Investor Putting Their Money?

Commercial Property Executive’s Contributing Editor Dees Stribling provides a breakdown, based on stats from Real Capital Analytics. The top two cities experiencing the highest volume of commercial property investments are unsurprising; however, there are many new cities that are making the list in 2015 and many top cities that have seen investment volume fall. Here’s an overview:

nyc skyline

The Predictable All-Stars

  • New York City- $36.8 B traded, 59 % increase
  • London – $29.7 B traded, 48 % increase

 

Reasons for Growth

  • Long-term legacies of being financial hubs, have been attracting investors for centuries
  • New York City largest national economy in the world
  • Part of “safe haven” countries so investors see stability
  • Post-recession track record of rental growth and investors predict that this will continue

The Up-and-Comers in Investment Sales (first half of 2015)

  • South Florida (and Miami) – $7.1 B, 88 % increase
  • Orlando – $3.8 B, a 280 % increase
  • L.A. – $16.9 B, 25 % increase
  • San Francisco – $15.9 B, 30 % increase
  • Chicago – A 94% increase!

Lenovo smallReasons for Growth

Among the reasons: global investors seeing the potential of these post-recession markets; opportunities in secondary markets; and Chinese investors finding new interest in Florida.

One example is 90 North Real Estate Partners’ acquisition of the 485K SF Lenovo Campus in Raleigh, NC earlier this year. (Pictured above)
Read more

Retail: E-Commerce Beyond Amazon?

Retail: E-Commerce Beyond Amazon?

Retailers are following you online—and here’s why that’s good. Forbes’ writer Erika Morphy moves us past Amazon and digs into how technology, such as SmarterHQ, can help online retailers predict buying patterns and serve up online options accordingly. Check out this e-commerce and overall retail story. 

Coastal markets hot for retail investment–As retail rebounds post recession, Real Capital Analytics looks at what markets are hot. Seven of the top 10 are coastal, with Chicago, Dallas and Houston the exceptions. The top? Manhattan, which accounted for 42 percent of the total investment sales. Click here for more. 

 

7 Aug. 2015-Multifamily Blog

7 Aug. 2015-Multifamily Blog

Chicago

Wondering if the multifamily frenzy will slow down? We’re not seeing a dent in the activity. Here’s a look:

Bisnow2015’s hot multifamily housing market. Bisnow unpacks the biggest multifamily housing sales (thus far) in Chicago during 2015. The biggest sale? Heitman’s $328 million buy of OneEleven Apartment (111 W. Wacker) from Related, creating the highest price ever paid for an apartment building in Chicago. That’s $651 K per unit. The second largest sale was Burnham Pointe Apartments. Crescent Heights paid $126 million or $423 K per unit. Check out Bisnow for more.


LEED_logo-in-Gold_lg
New multifamily properties go green. This fall, Xavier, a new eco-friendly and sustainable apartment complex by Gerding Edlen will open in the former Cabrini Green area on Chicago’s north side. The 18-story building will feature a mix of sizes, from studio to two bedrooms, and plenty of sustainable features. Locally sourced materials and the energy efficient design should help achieve LEED Gold.

Pacific Northwest

Logo-CommercialPropertyExecutiveWant more eco-friendly multifamily? Try the Pacific Northwest. Construction on Atlas, a 98-resident development by SolTerra Systems, is slated to begin soon in Wash. Look for a 2K SF retail component as well. See
Commercial Property Executive
 for more. 
Read more

Hotel Investment News

Hotel Investment News

U.S. Hotel Investment: Aug. 2015

Hotels have been hot investments lately. Here’s a snapshot of what’s going on in the market:

Logo-Crains

Chicago-area hotel investment sales are strongest since the recession, as increasing occupancies and higher room rates increase hotel profits. As seen in Crain’s Chicago Business, a Kentucky-based affiliate of Colombia Sussex purchased the Marriott Chicago O’Hare for $72 Million this week. The hotel developer’s purchase also included a New Jersey Marriott.

Logo-GlobeSt

Hotel Investment extends to Chicago’s suburban hotel market. According to Hospitality Real Estate Counselors, in 2014, there were 26 hotel transactions with a value of $300 million, a 30 percent increase from 2013. In 2015, there has already been 21 hotels sold in Chicago’s suburbs, totaling at a value of $225 million. Recent transactions include the Hyatt Lisle and the Embassy Suites Chicago-Schaumberg/Woodfield. See this
GlobeSt story
for more.
Read more

Office Trends and Investment News

Office Trends and Investment News

From New York to Los Angeles, here are some of the latest office trends and investment news items. 

NATIONAL

Global Logistics Properties is on another buying spree, announcing plans to buy a 100-property industrial portfolio from Industrial Income Trust for $4.55 billion. The assets are in 20 major markets, with many in L.A., Washington, DC metro area and Pennsylvania. See today’s 
GlobeSt. story
 for commentary from Avison Young on why this is happening. 

CHICAGO


Minnnew_dusk01_sm_withCrediteapolis-based Ryan Companies is starting construction on a 31-story, 373-unit tower, 833 North Clark Street Apartments, in Chicago’s Gold Coast. The project will be built on a 41,000-square-foot site that was purchased from U.S. Bank.

 

Chicago office market sees ongoing boost from suburban to city migration. As ConAgra announces plans to move to the Merchandise Mart, GlobeSt talks with Avison Young for a broader perspective on what this means long term to Chicago CRE.

Also…The increased demand for industrial real estate continues. Dallas-based Hillwood Investment Properties, a Perot company, acquired three class A industrial properties totaling 170,000 K SF in Chicago’s Tinley Park. 

NEW YORK


FAO imageThe exceedingly high cost of street-level land in Manhattan leads businesses to seek refuge elsewhere… like underground. This week the famous F.A.O. Schwartz closed down their doors after 29 years in exchange for a less-expensive subterranean, two-story location on Broadway.

Read more

Avison Young Report: Foreign Investment Demand Still Strong

Avison Young's Erik Foster and Mike Wilson Sold This 1.7 MSF Portfolio in SE Wisconsin for CenterPoint.

Avison Young’s Erik Foster and Mike Wilson Sold This 1.7 MSF Portfolio in SE Wisconsin for CenterPoint in Q1 of 2015.

A new report from Avison Young’s National Industrial Capital Markets Team shows demand still strong, but foreign investment activity leveling off in 2014.

Investors from Canada, the UK, Bahrain, Germany and other countries bought 185 industrial properties in key markets in 2014, a decrease from 213 in 2013. Among the top markets were: Chicago, IL ($178.3 million); Jacksonville, FL ($137.7 million); and Greenville, S.C. ($133 million).

“Foreign investors have been on a buying spree in the U.S. market for several years now, looking for opportunities to buy stable assets that can provide stronger yields than those found in their own or other foreign countries,” said Erik Foster, a principal with Avison Young and the practice leader for the National Industrial Capital Markets Group.

Among the highlights:

  • Canada will continue to top the list of foreign investors acquiring U.S. industrial assets.
  • Leasing fundamentals will continue to improve, creating tangible rent growth and continued positive absorption in most U.S. markets
  • A lack of supply will continue to push investment pricing higher
  • New spec construction will not come online fast enough to meet demand

See this GlobeSt story for more.

Spring 2015: Commercial Real Estate Trends

globest long

March 22, 2015

GlobeSt details these top commercial real estate trends from Paramount Capital Corp. Here are insights on:

  • The health of the apartment sector
  • Mezzanine loans
  • Private equity’s role
  • The future of single family portfolios

90 North Buys 485K SF Raleigh Office Campus

Feb. 23, 2015

This national GlobeSt. story details the $127 million acquisition of the Lenovo Enterprise Campus by UK-based 90 North Real Estate Partners and Dubai-based Arzan Wealth. The 485,000-square-foot office campus in Raleigh was sold by Philadelphia-based Rubenstein Partners and its partner Grubb PropertiesClick here for more on:
  • The ongoing shift in investor activity into secondary markets, such as Raleigh.
  • The geographic diversity of 90 North
  • The health of the Research Triangle Park and its tech sector tenants.

Says Dan Cooper, head of 90 North’s North American operations: “We’ve demonstrated geographic diversity with acquisitions in Raleigh, Chicago, and Denver, and we’ve shown the range of our financial resources with the ability to acquire assets ranging from $40 million up to and exceeding $127 million.”

Avison Young Sells 2 Industrial Portfolios in Milwaukee

Avison Young Sells 2 Industrial Portfolios in Milwaukee

CenterPoint Milwaukee Feb 2015

Feb. 20, 2015

GlobeSt takes a look at the Milwaukee investment market, focusing on two large portfolios sold by Avison Young’s Erik Foster and Mike Wilson for CenterPoint. See this story for details on:

  • How investors continue to look toward secondary markets to gain higher yields
  • Why Milwaukee is a draw. It has all the fundamentals in place that investors are seeking–strong local business climate, access to Chicago and Midwest distribution routes, etc.

 

 

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