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 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.
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.