The Preiss Co had its best year ever in 2013 and expects to pass that $320M mark this year with developments, acquisitions of core and older properties, and capital improvements. (Never underestimate the power of a face lift. Just ask Joan Rivers.)
CFO Joe Green tells us Preiss purchased seven properties across four campuses, refinanced five, and upgraded six. (And left the partridge in the pear tree for next Christmas.) Its portfolio reached 96.7% occupancy for the 2013-2014 term, and it pushed rents 3.4%. Joe says conditions are ripe to surpass that this year. The industry is aging, leaving capital-starved properties in need of renovations. That opens up opportunities to acquire product at great cap rates and upgrade. More debt and institutional equity want into the sector than ever before, and universities are relying more heavily on private parties for housing.
Preiss has $225M of acquisition and $125M of development pipeline now, Joe tells us. It’s targeting North Carolina (the firm is based in Raleigh and sees great opportunities at NC State, in particular), Georgia (it bought 709-bed 111 South, pictured, at Georgia Southern U last year), Texas (Preiss owns 4,000 beds in Austin and is eying more in the state), California (especially at San Diego State), Florida, South Carolina, Mississippi, and more. Joe says his company doesn’t do one-off deals for the sake of closing a transaction: It only enters markets where it sees the opportunity to grow a larger footprint. Preiss will also focus heavily on expanding its third-party management platform (already strong and well-known) this year.
One of Preiss’ biggest deals of 2013 was recapping two communities serving the University of Texas, including the 1,152-bed University Village at Austin (yes, that’s a real photo taken by a student). Preiss purchased the two properties five years ago and just closed a $100M refi and acquisition with a new institutional partner. Although it’s flying under the radar, that group will have a big impact going forward; Joe tells us they expect the investor to back several Preiss acquisitions this year. The UT properties are getting a $6M renovation. They’re over 95% occupied and are already 22% pre-leased for next year.
