CHICAGO: Why One CEO Loves Student Housing

Harrison Street Real Estate Capital CEO Chris Merrill is always on the hunt for non-traditional assets. That's why his company is so heavily invested in the student housing game, with properties near more than 80 universities across the country. Chris says the relatively limited supply of new student housing product is a big factor driving the firm's investments, as well as the solid 12-month, by-the-bed leases that produce robust cash flow. "The student housing market is becoming more institutionalized, and the 12-month leases give us some consistency" with returns, he adds.

Here's The Domain at Tempe, one of Harrison Street's properties near Arizona State University. Location-wise, Chris says that while some student housing investors may blindly think that being near a major university or market will guarantee a high-yielding product, it's not necessarily the case. "You can't hide behind a demographic," with inferior product, he tells us, adding that overeager builders near big schools run the risk of creating micro-market bubbles. But in general, Harrison Street likes to buy or build (with JV partners) near public universities with an enrollment above 10,000.

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