Featured Case Studies

884-Bed Student Housing Property at Mississippi State University

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Acquired in 2010 / Sold 2014

Background

Recently completed garden-style student housing property located 1/4 mile from campus.  The property was built in 2008 and included an adjacent 3-acre parcel of land for future development.  

The Challenge

The property was underperforming due to over-building, mismanagement, and tenant credit issues.  Current occupancy for the 2009/2010 school year was below 90% and the property was suffering from extremely high delinquency due to credit quality issues.

Strategies Applied

  •  Revamped the Property’s marketing approach and implemented numerous new promotional initiatives including a guerilla marketing campaign
  •  Realigned rents with the market  
  •  Made critical staff changes  
  •  Adopted stronger credit review policies and stricter credit standards
  •  Implemented multiple procedural changes to improve operations
  •  Developed 14 townhomes (56 beds) on vacant land included in the purchase

Added Value

Achieved 100% occupancy in Year 2 two despite a continued wave of new supply.  Collections improved dramatically as net delinquency was reduced to less than 1%.  Expenses declined over the first several years of ownership due to operational efficiency initiatives.  Rent growth over our holding period was nominal, but NOI growth exceeded 50% due to improved occupancy, operational efficiencies, and a substantial reduction in delinquency.  The additional 56 beds enhanced the overall yield of the investment and added significant value.

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