MJW Investments Company Profile

Seeing opportunity to enhance the student experience in off-campus housing at Brigham Young University in Provo, Utah, MJW acquired Liberty Square, one of the largest off-campus housing projects near BYU. Seeing opportunity to enhance the student experience in off-campus housing at Brigham Young University in Provo, Utah, MJW acquired Liberty Square, one of the largest off-campus housing projects near BYU.

Student Housing Business profiled MJW Investments in the September/October issue. MJW Investments has quietly been building a portfolio of off-campus student housing in a number of top university markets.

The company, based in Santa Monica, California, made a name for itself by acquiring value-add traditional multifamily properties, starting in the early 1980s when founder Mark Weinstein was in law school. Weinstein bought his first apartment building at age 21 and started building his portfolio in the Koreatown and San Fernando Valley areas of Los Angeles.

In the early 1990s, the company focused on receivership work following the creation of the Resolution Trust Corporation. In the late 1990s, MJW acquired approximately $200 million in real estate. Today, the company has acquired approximately $800 million in real estate investments to date, and has developed and owned more than 5 million square feet of commercial real estate.

“While we have focused on acquiring multifamily throughout our history, we also acquired a lot of older properties in downtown L.A.,” says Weinstein. With such a concentration of space, Weinstein decided to create a mixed-use village from 10 buildings he had purchased in L.A.’s fashion district. The result of that development was Santee Court, a project that has 500 apartments and condominiums, 100,000 square feet of retail; and amenities such as rooftop pools, basketball courts and underground parking.

“I wanted to take the area from one with dilapidated buildings to one that was vibrant with condos and apartments,” says Weinstein. “The area is now a vibrant, walkable community.”

Operating the apartments and condominiums gave MJW an idea of customer service. In the mid-2000s, the company decided to enter the student housing sector based on the praise its customer service focus had received from its residents. In developing condominiums, the company listened to potential buyers in what they wanted in amenities and unit finishes to create its products. The result was that the condos at Santee Court sold quickly.

“By understanding the likes and dislikes of your customer — in particular the students — you can create great environments that they want, not what you as the developer thought was great,” says Weinstein. “We applied the same fundamentals to our student housing business, with our chief fundamental that we must be close to campus.”

MJW’s first student deal was at the University of Oregon in Eugene in 2007; the company partnered with MHE Enterprises in the purchase of a multi-asset portfolio close to campus. Weinstein notes that while all of the nine buildings were close to campus, they were in poor condition. The company completely rehabbed all the buildings, necessitating quite a coordination from the construction front. At the University of California-Santa Barbara, the company also acquired several buildings and renovated the properties.

“Our DNA has been B and C properties,” says Weinstein. “This is what we do best, in multifamily and student housing. We can create value in what we choose to do.”

Today, the company is focused on value-add student housing acquisitions in top university markets. It has been acquiring Class B and C properties that are within walking distance to campuses, then performing turnarounds on those properties. MJW owns properties at the University of California-Santa Barbara; the University of Oregon; Brigham Young University and Washington State University. To date, the company has acquired nearly 3,000 beds and will soon surpass that with a new acquisition under contract in Michigan.

The company purchased a large property comprised of several buildings at BYU off-market. The properties there were in good condition but needed better management and enhancements to their amenities. The property — Liberty Square — is the second largest off-campus housing facility at BYU, and MJW wanted it to be known as the place for students to be. To do so, the company again surveyed potential residents. What it found was that students weren’t necessarily seeking amenities like granite countertops or new flooring; while they did want updated appliances, their most common requests were for enhanced social activities and better basic amenities. As a result, MJW saved nearly $500,000 by not adding unnecessary amenities that it had thought were wanted in the market.

“A lot of our success in the student housing sector is listening to the students,” says Weinstein. “Rather than doing what other developers are doing — just because they are doing it, we want the students to teach us what’s important. At BYU, the social media buzz from students living in our project is helping lease the property for next year. We have a waiting list.”

While MJW does not manage its properties, Weinstein says the company is “heavily involved” in day-to-day management of properties, and the oversight of its managers. For several years, it managed its own student housing properties before making the decision to outsource. While it relinquishes some duties, the company remains heavily involved in certain aspects, even down to student life offerings.

“Because we have managed our own student properties, we know what to look for in a manager and what to expect from a manager,” says Weinstein. “We are far more involved than an institutional owner would be; we are at each property often.”

MJW seeks properties from $8 million to $40 million, so its range is diverse. On its existing portfolio, the company has spent anywhere from $1 million to $4 million in capital expense renovating the properties. The company has been an all-cash acquirer and it’s known for making decisions and closing quickly. It is doing its due diligence on its Michigan acquisition in 18 days, for example. The company examines the markets it enters closely, paying attention to competition and new developments.

“We want to know if there is a great chance that there will be a lot of overbuilding, and how we might be able to mitigate that with our project,” says Weinstein.

The company originally had its focus on the West Coast, Mountain States and Pacific Northwest. With the tightness in those markets right now, MJW has expanded its search area nationwide.

“We need to go where the opportunities are,” says Weinstein. “We need to be nimble and have the ability to move at lightning speed. If you’ve done your market research before, you can move quickly.”