Monday, May 4, 2015
Student Housing Fund Partners Seek Value in Dorms
by Steve Lubetkin, Globest.com
Two large players making a major bet on the student housing sector say students want nicer living facilities near the schools they attend, while the schools are less interested in paying for it themselves.
Enter Campus Apartments, the oldest and one of the largest privately held student housing companies in the nation, and Clarion Partners, a leading real estate investment manager. The pair recently completed Campus-Clarion Student Housing Partners, a closed-end investment vehicle focusing on student housing in the U.S.
The vehicle closed with $402.9 million in equity commitments from high-quality domestic and international investors, predominately institutional. The fund will have approximately $1.2 billion in buying power, and is the largest student housing fund by a vertically integrated manager. Campus Apartments and Clarion Partners are co-general partners for the fund.
“The demand side is fundamentally solid, it’s not superstrong, but most projections indicate you’re looking at about 1.2 percent growth in the student population,” says Rob Greer, managing director for Clarion Partners and portfolio manager for the fund, in an exclusive interview with GlobeSt.com.
Greer says the steady but unspectacular demand growth and universities’ preference for investing in their academic programs instead of in housing. “So they are leaning on the private sector to provide capital and expertise to provide the housing opportunities for them,” he says.
Housing stock is also aging at most universities, he says.
“Our kids today have a higher standard,” he says. “That provides an opportunity to provide not only new product, with fancy pools and nice facilities, tricked-out meeting spaces and that kind of thing, but there’s also existing stock that really hasn’t been revitalized to its highest potential.”
Greer says the market is highly fragmented, and the Campus Apartments platform will enable investors to gather assets from smaller operators.
“We can find those kinds of assets that are very close to campus, that have good fundamental bones, and we can come in and make the necessary updates to them,” he says. “We might change out the furniture, we might update kitchens and bathrooms, and improve conference centers, and pool areas and fitness centers, and then bring a level of professional management to the effort.”
The fund will seek investments in student housing and university-related real estate throughout the U.S. and will look to execute its value-add strategy through the acquisition and development of on- and off-campus projects.
“We’re targeting value add returns,” says David Adelman, president and CEO of Campus Apartments, who also spoke exclusively to GlobeSt.com. “To achieve those returns, we’ll be buying product where maybe it’s first generation product or wasn’t really built as student housing. In the last five years we’ve done half a billion dollars in development. What you’ll also see sprinkled in is some public-private partnership where we help schools redevelop their land using our balance sheet.”
David Adelman, president, Campus Apartments
The fund expects to invest its capital over the next three years, Adelman says.
“We believe the fund benefits from a strong partnership between two platforms with a long and successful track record of investing in real estate,” says Greer. “The fund offers investors exclusive access to Campus Apartments’ pipeline of investments and operational expertise as well as Clarion’s long history as a leading real estate investment manager.”
www.omegare.com
Two large players making a major bet on the student housing sector say students want nicer living facilities near the schools they attend, while the schools are less interested in paying for it themselves.
Enter Campus Apartments, the oldest and one of the largest privately held student housing companies in the nation, and Clarion Partners, a leading real estate investment manager. The pair recently completed Campus-Clarion Student Housing Partners, a closed-end investment vehicle focusing on student housing in the U.S.
The vehicle closed with $402.9 million in equity commitments from high-quality domestic and international investors, predominately institutional. The fund will have approximately $1.2 billion in buying power, and is the largest student housing fund by a vertically integrated manager. Campus Apartments and Clarion Partners are co-general partners for the fund.
“The demand side is fundamentally solid, it’s not superstrong, but most projections indicate you’re looking at about 1.2 percent growth in the student population,” says Rob Greer, managing director for Clarion Partners and portfolio manager for the fund, in an exclusive interview with GlobeSt.com.
Greer says the steady but unspectacular demand growth and universities’ preference for investing in their academic programs instead of in housing. “So they are leaning on the private sector to provide capital and expertise to provide the housing opportunities for them,” he says.
Housing stock is also aging at most universities, he says.
“Our kids today have a higher standard,” he says. “That provides an opportunity to provide not only new product, with fancy pools and nice facilities, tricked-out meeting spaces and that kind of thing, but there’s also existing stock that really hasn’t been revitalized to its highest potential.”
Greer says the market is highly fragmented, and the Campus Apartments platform will enable investors to gather assets from smaller operators.
“We can find those kinds of assets that are very close to campus, that have good fundamental bones, and we can come in and make the necessary updates to them,” he says. “We might change out the furniture, we might update kitchens and bathrooms, and improve conference centers, and pool areas and fitness centers, and then bring a level of professional management to the effort.”
The fund will seek investments in student housing and university-related real estate throughout the U.S. and will look to execute its value-add strategy through the acquisition and development of on- and off-campus projects.
“We’re targeting value add returns,” says David Adelman, president and CEO of Campus Apartments, who also spoke exclusively to GlobeSt.com. “To achieve those returns, we’ll be buying product where maybe it’s first generation product or wasn’t really built as student housing. In the last five years we’ve done half a billion dollars in development. What you’ll also see sprinkled in is some public-private partnership where we help schools redevelop their land using our balance sheet.”
David Adelman, president, Campus Apartments
The fund expects to invest its capital over the next three years, Adelman says.
“We believe the fund benefits from a strong partnership between two platforms with a long and successful track record of investing in real estate,” says Greer. “The fund offers investors exclusive access to Campus Apartments’ pipeline of investments and operational expertise as well as Clarion’s long history as a leading real estate investment manager.”
www.omegare.com
Saturday, May 2, 2015
Liberty Breaks Ground on 45,000sf Building at Navy Yard
Liberty Property Trust broke ground this week on a 45,500-square-foot building at the Philadelphia Navy Yard to be occupied by Shanghai-based WuXi AppTec. The pharmaceutical company will use its third building at the Navy Yard to manufacture new cell- and gene-based treatments for cancer and other diseases, Felix Hsu, WuXi AppTec's senior vice president for U.S. business, said in a statement. The building will be finished next year, Liberty spokeswoman Jen Meyer said.
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Friday, May 1, 2015
Hill Completes HQ Move to Philadelphia
by Steve Lubetkin, Globest.com
Hill International has completed the relocation of its global corporate headquarters into Center City Philadelphia. Hill's new address is One Commerce Square, 2005 Market Street, 17th Floor, Philadelphia, PA.
“Relocating Hill’s global corporate headquarters to Center City Philadelphia will increase our presence as a leader in the local business community and broaden our opportunities to hire the highest-quality workforce as the best and brightest young professionals continue to look to work in urban communities,” David L. Richter, Hill's president and chief executive officer, tells GlobeSt.com exclusively. “Our new headquarters will put us closer to major air and rail transportation hubs giving our professionals immediate access to New York City, Washington, DC and other key locations.”
The company's new headquarters office contains approximately 60,000 square feet of office space under a 12-year lease with Brandywine Realty Trust. The new office space was designed by architecture and interior design firm L2Partridge and built by INTECH Construction. Hill was assisted on the relocation by real estate advisor Newmark Grubb Knight Frank.
Hill's former office in Marlton, NJ, has been closed. The company has opened a new office in New Jersey located at 10 Woodbridge Center Drive, Suite 430, Woodbridge, NJ 07095.
www.omegare.com
Hill International has completed the relocation of its global corporate headquarters into Center City Philadelphia. Hill's new address is One Commerce Square, 2005 Market Street, 17th Floor, Philadelphia, PA.
“Relocating Hill’s global corporate headquarters to Center City Philadelphia will increase our presence as a leader in the local business community and broaden our opportunities to hire the highest-quality workforce as the best and brightest young professionals continue to look to work in urban communities,” David L. Richter, Hill's president and chief executive officer, tells GlobeSt.com exclusively. “Our new headquarters will put us closer to major air and rail transportation hubs giving our professionals immediate access to New York City, Washington, DC and other key locations.”
The company's new headquarters office contains approximately 60,000 square feet of office space under a 12-year lease with Brandywine Realty Trust. The new office space was designed by architecture and interior design firm L2Partridge and built by INTECH Construction. Hill was assisted on the relocation by real estate advisor Newmark Grubb Knight Frank.
Hill's former office in Marlton, NJ, has been closed. The company has opened a new office in New Jersey located at 10 Woodbridge Center Drive, Suite 430, Woodbridge, NJ 07095.
www.omegare.com
5 Reasons to Believe in Philly CRE
by Steve Lubetkin, Globest.com
There are at least five reasons to believe in Philadelphia. They include: the rising number of companies locating in Center City; growth in the professional/business services segment; the changing demographics of Center City residents; rising office rents and a shortage of trophy office space; and the positive impact of university expansion and the presence of cable giant Comcast on the city.
“We do think Philadelphia is undergoing a resurgence. It’s been a little later to the game than other metro areas, but we think Philadelphia is beginning to turn the corner. Philadelphia offers some of the lowest commercial rents compared to some of its major metropolitan area cohorts.”
Among companies relocating or expanding in Philadelphia recently are: The American Bible Society (100,000 square feet, 200 jobs); EisnerAmper (42,000 square feet, 130 jobs); Hill International (60,000 square feet, 290 jobs); Axalta (38,000 square feet, 100 jobs); and Independence Blue Cross/Blue Shield (112,000 square feet, jobs to be determined).
Philadelphia also provides tax credits of up to $25,000 per job created or two percent of the annual wages paid for firms that create at least 25 new full-time jobs or increase their Philadelphia full-time workforce by 20 percent within five years, Learner says.
“That’s an added benefit to companies that may be looking whether to stay put or look at other areas,” she says.
Professional and business services firms are growing faster than other commercial sectors, research shows. Much of that growth in 2014 vs 2013 was in “computer systems design,” which grew 13 percent. Advertising and public relations firms were second in growth in that period, rising 6.9 percent.
The percentage of the Philadelphia County population in the 20-34 age demographic increased by 5.9 percent from 2007 to 2013, the research indicated, compared to a 5.1 percent increase in New York County, NY. The younger population living in the urban environment is driving some of the office relocation, as companies vie to attract Millennials with “live-work-play” models.
Trophy office space is at a premium in Philadelphia, with just under a dozen buildings regarded as “trophy” properties. The low vacancy is leading to some firming of office rents, but still at levels below other comparable metropolitan areas, Learner says.
Expansion of Philadelphia’s universities also encourages growth of the office sector, she says.
“Particularly as each of these universities continues to grow their incubation and innovation centers, that certainly will allow emerging companies to develop a presence and maintain a presence over time."
www.omegare.com
There are at least five reasons to believe in Philadelphia. They include: the rising number of companies locating in Center City; growth in the professional/business services segment; the changing demographics of Center City residents; rising office rents and a shortage of trophy office space; and the positive impact of university expansion and the presence of cable giant Comcast on the city.
“We do think Philadelphia is undergoing a resurgence. It’s been a little later to the game than other metro areas, but we think Philadelphia is beginning to turn the corner. Philadelphia offers some of the lowest commercial rents compared to some of its major metropolitan area cohorts.”
Among companies relocating or expanding in Philadelphia recently are: The American Bible Society (100,000 square feet, 200 jobs); EisnerAmper (42,000 square feet, 130 jobs); Hill International (60,000 square feet, 290 jobs); Axalta (38,000 square feet, 100 jobs); and Independence Blue Cross/Blue Shield (112,000 square feet, jobs to be determined).
Philadelphia also provides tax credits of up to $25,000 per job created or two percent of the annual wages paid for firms that create at least 25 new full-time jobs or increase their Philadelphia full-time workforce by 20 percent within five years, Learner says.
“That’s an added benefit to companies that may be looking whether to stay put or look at other areas,” she says.
Professional and business services firms are growing faster than other commercial sectors, research shows. Much of that growth in 2014 vs 2013 was in “computer systems design,” which grew 13 percent. Advertising and public relations firms were second in growth in that period, rising 6.9 percent.
The percentage of the Philadelphia County population in the 20-34 age demographic increased by 5.9 percent from 2007 to 2013, the research indicated, compared to a 5.1 percent increase in New York County, NY. The younger population living in the urban environment is driving some of the office relocation, as companies vie to attract Millennials with “live-work-play” models.
Trophy office space is at a premium in Philadelphia, with just under a dozen buildings regarded as “trophy” properties. The low vacancy is leading to some firming of office rents, but still at levels below other comparable metropolitan areas, Learner says.
Expansion of Philadelphia’s universities also encourages growth of the office sector, she says.
“Particularly as each of these universities continues to grow their incubation and innovation centers, that certainly will allow emerging companies to develop a presence and maintain a presence over time."
www.omegare.com
Philadelphia Industrial Vacancy Stays at 8.0%
The Philadelphia Industrial market ended the first quarter 2015 with a vacancy rate of 8.0%.
The vacancy rate was unchanged over the previous quarter, with net absorption totaling positive 2,325,770 square feet in the first quarter. That compares to positive 2,438,459 square feet in the fourth quarter 2014. Vacant sublease space increased in the quarter, ending the quarter at 1,928,064 square feet.
Tenants moving into large blocks of space in 2015 include: Zulily, Inc. moving into 800,250 square feet at 10 Emery St, Amazon.com moving into 700,000 square feet at 2 Ames Dr, and Jacobson Companies moving into 300,000 square feet at Harrisburg Distribution Center #4.
Rental rates ended the first quarter at $4.47, a decrease over the previous quarter.
A total of eight buildings delivered to the market in the quarter totaling 2,721,284 square feet, with 10,814,461 square feet still under construction at the end of the quarter.
This trend is compared to the U.S. National Industrial vacancy rate, which decreased to 7.0% from the previous quarter, with net absorption positive 49.59 million square feet in the first quarter. Average rental rates increased to $5.63, and 284 industrial buildings delivered this quarter totaling almost 37.5 million square feet.
www.omegare.com
The vacancy rate was unchanged over the previous quarter, with net absorption totaling positive 2,325,770 square feet in the first quarter. That compares to positive 2,438,459 square feet in the fourth quarter 2014. Vacant sublease space increased in the quarter, ending the quarter at 1,928,064 square feet.
Tenants moving into large blocks of space in 2015 include: Zulily, Inc. moving into 800,250 square feet at 10 Emery St, Amazon.com moving into 700,000 square feet at 2 Ames Dr, and Jacobson Companies moving into 300,000 square feet at Harrisburg Distribution Center #4.
Rental rates ended the first quarter at $4.47, a decrease over the previous quarter.
A total of eight buildings delivered to the market in the quarter totaling 2,721,284 square feet, with 10,814,461 square feet still under construction at the end of the quarter.
This trend is compared to the U.S. National Industrial vacancy rate, which decreased to 7.0% from the previous quarter, with net absorption positive 49.59 million square feet in the first quarter. Average rental rates increased to $5.63, and 284 industrial buildings delivered this quarter totaling almost 37.5 million square feet.
www.omegare.com
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