08/22/2013 | By Carisa Chappell
Just in time for the start of the school year, Inland American Communities Group, Inc. has acquired two new student housing properties to add to its portfolio.
The Dallas-based REIT, a wholly owned subsidiary of Inland American Real Estate Trust, Inc., announced on Aug. 15 that it purchased properties in Arizona and Arkansas for a combined total of $145 million. The two facilities will operate under the University House brand. Both properties are located within walking distance of the universities, and Inland says they are scheduled to be 100 percent occupied for the 2013-2014 school year.
“Inland American was attracted to both the Domain at Fayetteville and the HUB on Campus due to their close proximities to major state universities. In addition, both student housing communities are very new projects that offered attractive occupancy rates above 97 percent at the time of acquisition,” “said Travis Roberts, president of Inland American Communities.
Inland American Communities purchased HUB on Campus, a 640-bed community at Arizona State University in Tempe, Ariz., with ground floor retail space and adjacent land for future development, from Core Campus LL, for $103 million. The student housing property comes with luxury amenities including two resort-style pools, a clubroom with gaming systems, fitness centers, a 22-foot LED outdoor TV screen, a yoga and steam room, outdoor grilling station, and indoor and outdoor study areas and conference rooms.
He added that today’s student housing facilities are different than those of a decade or so ago with the biggest differences being location, amenities and technology.
Travis said that location was a primary driver when Inland American selected the Arizona property. Today, many student housing community locations have shifted to be as close to campus as possible for pedestrian access, and are most commonly built vertically on smaller plots of land, according to Roberts.
“It is the best location of any new product entering the market and is also within walking distance of the Arizona State University campus. Located along a high-traffic corridor at the north end of campus, the property offers easy access to sports, entertainment and academics,” he said. “In past decades, communities would be built three miles from campus as a suburban, multifamily apartment complex,” he said.
He also said that The HUB on Campus is “the most highly-amenitized property in Inland American’s student housing portfolio, offering cutting-edge features and services for its residents.”
The facility's fully furnished apartments include custom furniture, flatscreen televisions, stainless steel appliances, washers and dryers within the units, and private patios and balconies. Additionally, the community is located across the street from ASU's Sun Devil Stadium and in close proximity to Tempe's Mill Avenue entertainment district.
Additionally, the amenities have become more state-of-the-art and tailored to students’ needs, according to Roberts.
“The number one amenity necessary today is high-speed Internet access that students can use when studying outside of the classroom. Internet access was not an afterthought a decade ago, but it has certainly become a higher priority today with the multiple devices that students can be using at one time.”
The private REIT also purchased the Domain at Fayetteville at the University of Arkansas in Fayetteville, Ark., for $42 million. Amenities include a luxury clubhouse with a game room, fitness center, resort-style pool, theater room and outdoor kitchen with grilling stations. The fully furnished apartments are also outfitted with stainless steel appliances, flatscreen televisions, and washer and dryer units.
Travis said that with housing budgets at university decreasing, students growing and existing housing properties being outdated and offering little in the form of amenities, investment fundamentals are positive for the student housing segment.
“As we expand into new markets, our continued strategy is to build our portfolio by breaking ground on new development and purchasing recently opened properties at top tier schools,” Roberts said.
Inland American Communities Group, Inc. is a development, acquisition and management organization that owns communities in urban-infill and university markets across the United States. The company was formed in 2007.