ACQUISITIONS

PEP has established itself as one of the leading student housing buyers in the U.S., and built a strong reputation through its thorough pre-offer due diligence, standing behind its purchase offers and unparalleled closing performance.  Since 2007, PEP has completed more than $800 million in student apartment acquisitions representing 20,000 beds, ranking among the Top 10 buyers in the country over that time frame.  In addition, PEP is targeting more than $350 million in Core, Core Plus and Value-Add acquisitions over the next several years through strategic deployment of programmatic institutional equity capital commitments.

 

Investment Strategies

PEP has developed targeted student housing investment strategies based upon fundamental research and demographic data, and assessment of particular university markets, product types, property locations/characteristics and investment opportunities.  Of course, the company is constantly updating its research and fine tuning its investment strategies to adapt to changing investment market conditions and opportunities.

Core Investments:  PEP seeks investment in existing Core student apartment assets.  Those Core properties are generally described as institutional-size, institutional quality, purpose-built student apartments at Tier 1 universities characterized by stabilized occupancy and steady cash flow in strong markets.

Core Plus Investments:  Core Plus investment opportunities are sought that offer the opportunity to transform properties into Core assets through superior management, light capital investment or future debt re-financing.  Generally, these opportunities consist of institutional quality and sized assets located in strong markets at Tier 1 universities, but which properties are under-performing or under-priced due to inferior management, above-market interest rates, over-leverage or lack of capital investment (e.g. deferred maintenance).

Value-Added Investments:  PEP pursues Value-Added Investments in student apartments where return expectations are higher commensurate with a higher investment risk profile.  This strategy seeks fundamentally sound underlying assets that are under performing through distressed ownership or debt structure, soft market conditions, and/or deferred maintenance.  Value-Add Investments can also include more significant renovation or acquisition/rehab strategies.

 

Investment Criteria

  • Class A, purpose-built student apartment properties
  • Class A-, quality student apartments with pricing advantage or opportunity to upgrade
  • Located near a leading public college or university with enrollment of 15,000+ students (headcount) that plays Football Bowl Subdivision (FBS, formerly known as Division IA) football
  • Purchase price of $15 million or greater, with 400–1,000 beds
  • College or university has a stable or growing enrollment outlook (Core and Core Plus Investments) or has experienced short term enrollment declines or volatility, but with expectations for future stable or growing enrollments (Value Add)
  • On-campus housing represents less than 40% of the student population
  • Current or projected strong local supply and demand characteristics
  • Located within walking distance to campus, on established shuttle/bus/trolley line that serves the campus, or within an established cluster of student apartments

For more information regarding acquisitions, please contact Matthew Maruccia, Chief Investment Officer, at mmaruccia@pierceeducationproperties.com

Pierce Education Properties, L.P.
8880 Rio San Diego Drive, Suite 750, San Diego, CA 92108
Ph: 619.297.0400