Investors - MAY 17, 2017

Waypoint launches student housing affiliate

by Andrea Waitrovich

Waypoint Residential has launched a new affiliate for the student housing sector.

Waypoint Campus Housing will specialize in and strategically grow Waypoint’s existing student housing business. Waypoint additionally announced that Waypoint Campus Housing LLC recently completed the purchase of four properties of a five-property student housing portfolio comprising 2,638 beds that it acquired from Blue Vista Capital Management for $102 million.

The newly acquired properties in the portfolio include High View Place, serving the University of Texas at San Antonio; Maverick Place, serving the University of Texas at Arlington; Rebel Place, serving the University of Nevada at Las Vegas; and Spring Place, serving the University of North Carolina at Greensboro. The fifth property is slated to close in June 2017. While the assets have been well-maintained, a unique capital improvement program is planned for each, including upgrades to the unit interiors, exteriors and common area amenities.

“This portfolio represents an attractive acquisition with several compelling attributes that we typically look for in our student housing investments,” says Jeremy Pemberton, who was appointed to lead Waypoint Campus Housing. “The properties benefit from a comprehensive array of highly-desirable amenities and serve universities with strong projected enrollment growth. Additionally, the geographically diversified portfolio includes varying degrees of purpose-built student housing markets, from evolving ones to those that are more mature and established, creating an attractive yield profile.”

Waypoint entered the student housing sector in 2016 when it purchased three properties comprising 1,122 beds for an aggregate $58.3 million. With the completion of all five assets in this acquisition, Waypoint will have acquired 3,760 student housing beds for approximately $160 million.

Other investors in the student housing sector include Quad Real, CA Student Living and GI Partners, which formed a $600 million joint venture to acquire, develop and manage student housing at select universities throughout the United States.

Emerging fundamentals in the U.S. student housing market are creating change and opportunity. Students living in on- and off-campus housing increasingly demand walkable locations with modern amenities such as fitness centers, study lounges and communal areas, as well as features like high-speed Internet.

According to TH Real Estate’s latest research report, THINK U.S.: Student Housing, institutional interest and investment in the sector is growing and totaled approximately $9 billion in 2016. The report examines the favorable demographic trends that underpin demand, as well as strategies for success in the sector.

The report finds millennials — those born between 1981 and 1997 — are pursuing college and post-graduate degrees in record numbers, creating a huge demand for student housing. These students are seeking custom-designed complexes, with private bedrooms and bathrooms, as well as high-end amenities such as swimming pools, fitness centers and state-of-the-art Internet connectivity.

During 2016, the U.S. student-housing market had its seventh consecutive year of annual rent growth, and inventory has increased by 56.3 percent over the past 10 years, according to a Kroll Bond Rating Agency report summarizing current trends in the industry.


Other recent U.S. student housing deals include:

CPPIB JV acquires $1.6b student housing portfolio

GIC JV buys $1.4b U.S. student housing platform

Glossary, videos, podcasts, research in the Resource Center

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