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Student Apartments

OC Ventures Acquires Two Student Housing Properties in New York and North Carolina

CHICAGO, IL – OC Ventures, a Chicago-based leader in student housing real estate investment, announced the acquisition of two student housing properties in Rochester, NY and Wilmington, NC. These acquisitions mark the beginning of an aggressive growth strategy in the student housing sector for OC Ventures. The investment firm is the second-largest housing owner and operator in New York and has now acquired 3,700 beds in the last two years.
Student housing is one of the most attractive real estate investments today, says Steve Zhang, Chief Investment Officer at OC Ventures. It s one of the few real estate investments that are relatively recession-proof, provides stable cash flows, and offers healthy rent growth as college enrollment continues to increase. We offer investors the opportunity to tap into lucrative student housing investments.
In its latest deal, OC Ventures acquired the Hill at RIT and the Lighthouse at UNCW. The Hill at Rochester, is a 118-unit, 362-bed student community near the Rochester Institute of Technology ( RIT ) in New York. The Lighthouse is a 124-unit, 348-bed student community pedestrian to the UNC Wilmington in North Carolina.
The acquisition of The Hill at RIT and Lighthouse at UNCW are both strategically important to us, Zhang explains. For The Hill, RIT is the only sizable engineering-focused private University in Upstate New York. We believe enrollment will keep growing, thus creating a favorable demand and supply dynamic for student housing owners. Additionally, The Hill represents our fourth acquisitions in Upstate New York with the same capital partner. The four properties make an attractive homogeneous portfolio, which also solidifies our position as the second-largest student housing owner in Upstate New York.
For Lighthouse, we are excited to acquire a true pedestrian asset to be our third acquisition in the UNC system, Zhang continues. Our business plan includes upgrading in-unit furniture, adding a package room, and increasing the overall functionality of the clubhouse.”
Both properties feature spacious floor plans with equal bed-to-bath parity. Each luxury unit is fully furnished and offers modern kitchens with granite counters, high-speed Wi-Fi, wood-style flooring, and in-unit washer and dryer. Community amenities include a fitness center, study lounges, recreation rooms, pet parks, outdoor swimming pools, and hot tubs, grilling stations, and hammock gardens.
Varsity Campus, a full-service student housing management firm, will manage the Hill at RIT and the Lighthouse at UNCW. With six student communities in New York, Varsity Campus is the largest student housing manager in New York by market share.
Varsity Campus is excited to have the Hill and the Lighthouse join our managed portfolio, said Jerry Wojenski, CEO of Varsity Campus. By applying our operations and leasing systems, we plan on pushing rent growth and reducing operating expenses to improve the yield from these investments. We have a proven track record of executing our client s investment goals.
OC Ventures growth strategy includes a robust pipeline of acquisitions planned in 2020. The firm is actively investing in college markets with strong enrollment growth as well as opportunities with a value-add component. OC is on track to become a top 25 owner and operator in student housing by the end of the year.
About OC Ventures: OC Ventures is a Chicago-based real estate investment firm specializing in student housing. The company is active nationally, focused on opportunistic investments. For additional information, contact Steve Zhang at zhangshaofan@oc-ventures.com.
About Varsity Campus: Varsity Campus is a Chicago-based student housing management firm. Varsity manages over 5,000 beds nationally. For additional information, contact Colton Price at cprice@varsitycampus.com.

Categories
Student Apartments

Multifamily Market Leveraging Student Debt

Recently, CBRE released details of a research titled, Student Debt Woes Feed Multifamily Markets; the brief aptly sheds light on how many Americans are hesitant to buy a home and are instead choosing to extend their stay in their rented apartments. However, there was a positive twist to it when considered from a societal perspective.

Jeanette I. Rice, the Head of Multifamily Research for CBRE, suggests that there has been a gradual decline in the number of people seeking out students’ loans and it would frankly make more sense if most young people didn’t have to take out loans to study a course in college or university.

Regardless, even with the dwindling number of students taking out student debts, the ripple effect is bound to remain for a longer time. Rice further maintained that the loan problem isn’t going to disappear anytime soon, because the costs affiliated with acquiring a graduate and undergraduate degrees are on the rise.

IMPACT ON HOME BUYING

The authors who published the brief to highlight how much impact student debts had on home buying maintained that it wasn’t a new phenomenon, even as Rice reckons that the industry is fully aware that these debts are stopping many people from buying homes.

But the statistics reveal a whole lot about the story, Rice maintains, highlighting that in 2019, student debt hit $1.5 trillion – double what it was a decade ago. In 2018, 65 percent of graduates had one form of student debt. Furthermore, the average student debt per loan recipient rose to over $35,000 in 2018. Besides, most potential young home buyers have held off on the idea of buying a home because of student debt.

According to the brief, once you adjust for inflation in 2019, the cost of tuition, board and room has more than tripled since 1978. Also, the costs of higher education is predicted to continue rising above the inflation rate.

An apartment list survey conducted last year revealed that college grad students that had taken out student loan require around 12 years to save up 20 percent for a down payment. This time increases by around three years for those that reside in metropolitan areas with high housing costs such as Austin, San Francisco and Denver.

Rice also mentions that she has carried out extensive research in factors that influence home buying, including patterns, demographics and lifestyle. Adding that student debt is only a part of the larger picture and it is expected that home-buying will be put on hold by at least a few years compared to the previous generation. Rice also suggested that this development would translate into more rented households in the U.S.

DELAYING HOMEOWNERSHIP

The CBRE also highlighted that despite earning significantly higher income thanks to their degrees, Millennials and Generation Z alike, will likely not become homeowners soon after school thanks to their incurred student debts.

National Association of Realtors (NAR) highlights that around a quarter of millennials opine that coming up with the down payment was the most challenging aspect of buying a home. Also, young homebuyers cite that their incurred debt is the primary reason why they couldn’t save up for the down payments. NAR also reported that High debt-to-income ratio is a common reason why potential homebuyers are refused a mortgage.

Due to lower inventories of lower-priced homes and rising home prices coupled with high student debt, most Millennials will be unable to buy their own homes anytime soon. Conversely, the inability for homebuyers to purchase homes is an advantage for the multifamily housing industry, which – due to increased demands – have since experienced steady growth over the past decade.