Campus Advantage To Co-Invest Again With Teachers’ Fund

by Katie Sloan

Austin, Texas — The fund will rely on CA to identify markets.

The Crimson property in Tuscaloosa, Ala., was acquired during Campus Advantage and CalSTRS’ first JV. CA CEO Mike Peter says the company will follow a similar script this time. Austin, Texas — Campus Advantage and the California State Teachers’ Retirement System (CalSTRS) will be partnering for a second co-investment joint venture. CalSTRS’ investment manager for the partership is Heitman LLC. The venture is anticipated to acquire approximately $150 million in student housing properties across the United States over the next two years.

The relationship between CalSTRS and Campus Advantage began in 2006, when the company took on a 16-property management portfolio for the pension fund.

After transition and positioning of those assets, CalSTRS approached Campus Advantage in 2007 with a joint venture that acquired seven properties — 4,749 beds — totaling more than $193 million. That portfolio is currently 97.2 percent occupied and has achieved a rent growth of 4.1 percent for the 2012-2013 academic year.

“We’re back in the market and looking to acquire deals,” says Mike Peter, CEO of Campus Advantage. In the first partnership, the properties were located near Texas A&M University, the University of Missouri, the University of Iowa and the University of Kansas, among others.

“We’re likely to follow a similar script this time.” Peter says. “Our role is to identify the markets and underwrite the opportunities. We’ve got excellent relationships in the brokerage community and we have been identified in the past decade as a first-in-class service provider to the industry.”

CalSTRS is the largest teachers’ pension fund and the second largest public pension fund in the United States. Serving educators teaching at public schools, CalSTRS’ portfolio is valued at $155.4 billion. Its investment advisor, Heitman, is headquartered in Chicago and it manages approximately $26 billion in real estate investments in North America, Europe and Asia.

“In addition to student housing being an attractive investment to achieve the kinds of returns they’re looking for in their pensions, there is also a philosophical alignment, since we are investing in the educational sector on behalf of a pension system that benefits California teachers,” Peter says. “Social and educational programming is associated with how we operate, and we really are making a difference in the lives or our student tenants.”

Campus Advantage currently manages more than 25,000 beds at 48 communities in 20 states.

— Lynn Peisner


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