As the student housing market has grown in size and sophistication, competition among the industry’s top players has intensified. In many cases, access to capital has helped publicly held student housing REITs sharpen their competitive edge. However, private players are also leaving their mark on the market, often selecting different approaches to achieve similar end goals.
“We’re all trying to do the same thing: We’re trying to find the best locations as close to major universities as we can,” says Travis Roberts, president of Inland American Communities Group, a private student housing development, acquisition and management firm headquartered in Dallas.
Roberts says where his firm tries to differentiate from the public REITs is to react quickly and be as flexible as it can on structuring deals with potential partners.
Bob Clark, president of Atlanta-based student housing developer and manager Peak Campus Management, agrees that being nimble is a plus for the private players in the student housing market.
“We can probably be more opportunistic on our pricing strategy versus the publics. The publics need to have steady rent growth, and they don’t get credit for overachieving. The get creamed by Wall Street, if they don’t hit their numbers,” says Clark. “We can take advantage and push rents this year and maybe not so much next year. We can have more aggressive rent growth as a function of not having to worry about Wall Street’s impression of what we’re doing.”
Michael Orsak, senior vice president of investments for Austin, Texas-based student housing operator and manager Campus Advantage, says the biggest difference between his firm and the large publicly traded REITs is the investment strategy.
He says over the past couple of years, the REITs have largely been more focused on development rather than acquisitions.
“Over the past 12 months, a lot of our acquisition velocity has been because the REITs have stepped to the sidelines,” Orsak says. “They are starting to step back in, so things could change over the next 12 months in terms of competing with them on acquisitions.”
Clark adds that he believes student housing operators and managers need to forget being competitive with the public players and look at the overall market.
“At Peak, we want to continue to focus on what we can control. What we can control is having great people join our company, continuing to focus on the science and strategy that exists behind our operating platform, and having a laser focus on world-class execution. If we do those things, it’s my judgment that we’ll compete well against everybody.”
For more perspectives and strategies from the private players in the student housing market, check out the session “Student Housing View from the Non-Publics” at the 2014 NMHC Student Housing Conference and Exposition.
This premier student housing event, which will be Sept. 30-Oct. 2 at the Palmer House Hilton in Chicago, is open to NMHC members and non-members and brings together nearly 700 owners, developers, lenders, brokers and university partners.
Article by Christine Serlin for the National Multifamily Housing Council.