With 80 investment sales totaling $2.4B, 2014 was the third most active sales market in the history of student housing. And FourPoint principals Chris Epp and Chris Bancroft expect no less in 2015.
Last year, 31 Class-A properties traded for an average $75k per bed and 6% cap rates. This year, pricing will jump even higher. Chris and Chris (pictured, Chris Epp, Chris Bancroft and director Meredith Wolff) believe some of the biggest core transactions the industry has ever seen will trade in Q1 at record cap rates between 5.25% and 5.5%. (Heated competition and a dropping 10-year Treasury have been helping investors get really aggressive.) The Chrises have one such deal under contract now, a high-density property that’s trading at a 5.25% cap rate.
We’ll continue to see new buyers flock to the asset class, the gents tell us. REITs, foreign equity and institutional funds still dominate Class-A acquisitions, but private capital is stepping up. For example, the duo sold The Den (pictured) for Gilbane Development to a high-net-worth individual. That 552-bed property was developed by Gilbane 1.5 miles from the University of Missouri. By the time FourPoint called for offers, it was 95% pre-leased.
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