Campus Apartments Looks Ahead at End of Record-Breaking Year

In his role as CEO of Campus Apartments, David Adelman is considered one of the country’s leading experts on student housing and a driving force in college and university real estate development.

Adelman has been responsible for strategic acquisitions, creative development, rehabilitation projects and the consolidation of owner-operators in various locales, helping Campus Apartments to redefine university living, both on- and off-campus, and expanding the company’s footprint to 24 states.

As 2016 came to a close, Adelman looked back at student housing investing for the year.

MHN: Now that 2016 is behind us, how would you characterize the year in terms of student housing investment opportunities?

Adelman: We’ve broken previous records on the volumes of sales transactions. 2015 was such a high and I didn’t think we would top it, but thought we would come close to it. It’s good for the industry and more importantly, the amount of institutional capital that came into the space is really impressive.

MHN: How was 2016 for Campus Apartments?

Adelman: For us, we are a value-add buyer. We raised a $400-plus million fund that we are investing out of and we’re buying assets that are ready for repositioning with extensive capital investments. We have been able to make some great buys that we are really excited about in some key markets like Syracuse, Lehigh University and College Station, Texas. We do a fair amount of development, and we announced about $250 million in new construction deals.

MHN: What areas of the country are popular for student housing investing today?

Adelman: It might be better to ask if there’s any place that’s not popular. I think as new capital has come in, we’re really seen the really close-in, core-type product, but then there’s some of the capital going further away at state schools because they are great buys. It’s hard to pick a location or school specifically, because we evaluate market to market, and look at supply, the demand and the disposable income of the student to ascertain what opportunities exist.

MHN: What do you feel are important things that investors need to be aware of in today’s student housing environment?

Adelman: There’s passive capital looking to team up with someone like us and what’s important with new capital coming into the space is making sure they are aligned properly with whoever their operator is and making sure they understand targeted returns and the opportunities in the market. After what we’ve experienced the last few years, it’s all about how do we keep the momentum going. This has been a lot of development delivered over the last three years so you want to make sure you are not entering the market with too much supply coming on board.

MHN: What do you foresee in 2017? What can we expect from the company in the year ahead?

Adelman: Our pipeline of development deals is pretty strong; we’ve announced four deals that will be under construction in 2017. We’ve also continued to add on to our on-campus development business, where we build on-campus for universities and we’re really pleased about that as well. We’re talking to a couple of people who are looking to prune their portfolio a little bit and we expect our acquisition pace to continue and improve in 2017.