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The student housing industry has proven a lack of discipline in overbuilding markets, so Virtus Real Estate Capital acquisitions director Kevin White (our BASH speaker is shown here with his wife in Rome in front of the Trevi Fountain) spends a lot of time upfront understanding the university, local housing market and the deal’s position in the market before spending a penny. Virtus is always looking for ways to improve the property and increase NOI, Kevin tells us. The company pays particular attention to its relative value in the market both at the time of acquisition and after it has implemented its business plan.
Kevin says growing markets with barriers to entry are his firm's preferred investments. Virtus needs to see enrollment growth and barriers to feel comfortable that new supply isn’t going to negatively impact future success, Kevin tells us.
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Kevin says one operational challenge is finding high-quality talent at the property level. As the student housing industry continues to grow, it’s difficult to find strong on-site general managers and marketing managers, especially in small markets. Kevin says he has seen weak teams cause Virtus’ properties to underperform and strong teams significantly outperform the market, creating value at the property level.
Virtus recently closed on a 531-bed student housing development next to the University of Houston, Gateway on Cullen (shown above). It’s a JV between Virtus and Fountain Residential. Kevin says the University of Houston has experienced phenomenal growth and the company believes it will continue to grow while becoming a more well-known Tier 1 research institute. Hear more from Kevin and others at Bisnow's annual student housing summit, an all-day affair in Philadelphia June 14. Register here.
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