Columbia, Mo. — Company says its turnaround strategy resulted in investment returns for investment partner.
Campus Advantage has sold Campus View in Columbia’s University of Missouri market to Lutz Real Estate Investments. The sale was completed in July, 2014. According to Campus Advantage, Campus View was an underperforming property that delivered significant rates of return for investors on this deal — California schoolteachers.
Campus Advantage originally purchased Campus View in March 2008. It was the third property purchased — and the first sold — as part of a joint venture with an affiliate of Heitman LLC. At the time of purchase, the 656-bed property was at 96.2 percent occupancy. Within seven months, Campus Advantage had leased it up to 98 percent occupancy. Campus Advantage says it has helped the property achieve an average occupancy of 99.3 percent.
Over the past six years, Campus Advantage’s value-add strategy has allowed investors to double the amount of equity originally invested into Campus View, according to the company.
“Campus View is a perfect example of how we were able to take a property in the competitive Columbia student housing market and make strategic improvements to add value and generate a solid rate of return for investors,” says Campus Advantage President and CEO Mike Peter. “This is just one of our success stories.”
Campus Advantage says it turned the property around by securing a master lease with the University of Missouri shortly after purchase, resulting in an increase in master-leased beds at the property, from 37 percent (244 beds) to 66 percent (436 beds); implementing a $2.8 million capital improvement program to improve amenities and unit interiors, resulting in compounded revenue growth of 73 percent and net operating income (NOI) growth of 154 percent; and that it grew rents, from $246.22 per bed in the 2007/2008 academic year to $443.53, an 80 percent increase, in the 2014/2015 academic year.