Should there be more cottage-style development in the Northern US? Trinitas Ventures completed construction of The Cottages on Lindberg serving Purdue. It's the farthest north anyone's developed such a property, and it's blowing away expectations.
Trinitas COO
Loren King and CFO
Mark Larson tell us they've held this
18-acre site since the early 2000s, when they developed 1,134-bed
Willowbrook West Apartment (the first by-design student housing project at Purdue). They planned another medium-density student housing project there, but local officials wanted a
low-density development and repeatedly refused rezoning. As cottage properties became more prevalent through the South, Trinitas saw the opportunity to make a student housing project work on the site.
Loren says demand has been extraordinary. The project was
90% pre-leased in the first nine weeks of pre-leasing (Willowbrook wasn't even in the double digits at that point), and they already have a
waiting list for 2014 and 2015. Rents are up
18% from opening day (August 2012), and the project is now priced at the
top of the market. Loren says cottages aren't the easiest product, and they aren't right with every market. Since they're low-density and require
lots of land, most aren't really close to campus (Trinitas' site is a mile and a half away). The secret to cottage success: an intimate
sense of community (and a pool that doubles as a Tetris block).
Trinitas plans to develop
1,500 to 3,000 beds annually for the next few years, but no more cottage communities are in the pipeline. It recently broke ground on the
Collegiate on Angliana, an infill redevelopment one mile from the University of Kentucky. The
699-bed property is a four-story townhouse format and will open this August.
Corvias Campus Living launched its
first student housing development, serving the brand new
Alabama College of Osteopathic Medicine. Corvias Group program director
Heath Burleson tells us Phase 1 is under construction, including three 31k SF garden-style residential buildings totaling
72 units and a 3,000 SF clubhouse (delivers July). Phase 2 will add three more buildings, doubling the beds. The timeline depends on school
enrollment, but Heath suspects it'll break ground this fall. Corvias will manage the property when it delivers.
Ellis-Trick Multifamily could've been called the
hat trick company with
three scores: a property
close to the University of Alabama, the university's huge
enrollment growth, and an
experienced sponsor. HFF associate
Adam Herrin (right, here with PricewaterhouseCoopers director of real estate research
Charles DiRocco) arranged a
$20M fixed-rate loan for Ellis-Trick's fourth Tuscaloosa student housing project to pay for construction of the 2011-era 99.7% occupied
Bluff at Waterworks Landing. The
308-bed project brings Ellis-Trick's portfolio to about
2,000 beds. Adam secured the 10-year, 3.77% fixed-rate loan through Freddie Mac's CME program.
Adam says a lot of owners are pursuing
fixed-rate financing via Freddie and Fannie for existing purpose-built student housing because of the attractive leverage and interest rates. Student housing is dynamic because it's more
operation-intensive compared to a conventional deal, and
success is partially
tied to the universities' enrollment projections, on-campus housing supply fundamentals, off-campus housing supply, and so forth, Adam tells us. On the flipside, if the market and university fundamentals work in the favor of the asset, it makes financing easier, he says.
Any other journalism majors out there? Follow-up question: What were you thinking? Send story ideas to tonie@bisnow.com and catie@bisnow.com.
