University Heights College Station Apartments, a complex of 17 three-story buildings on about 20 acres at 1101 Luther St. West, was purchased for $34.5 million from a Texas limited partnership, Fairfield College Station. Representing the seller was Ryan Reed of CB Richard Ellis Inc. in Dallas.
The complex, built in 2002, has units averaging 987 sf. The mix is 48 one-bedroom units, with a monthly rent averaging $707; 96 two-bedroom apartments, $505 per month; 68 three-bedroom floor plans, $429 per month and 96 four-bedroom designs, $415 monthly. Amenities include a clubhouse with kitchen, game room, fitness center, computer lab, swimming pool and picnic area.
"This is an attractive investment vehicle for certain types of investors," says Luke V. McCarthy, president and CEO of Evergreen. He says Evergreen has acquired three similar properties for 1031 exchange investors so far this year and "several more projects in the pipeline."
McCarthy tells GlobeSt.com that off-campus housing is a good 1031 exchange choice for many reasons. The demand for such housing is growing as student populations increase and schools build fewer dorms because of tighter budgets. Plus, off-campus complexes boast consistently high occupancy rates. In a conventional apartment situation, "new apartments are competing for tenants and against new subdivisions, where those tenants can purchase a starter home and pay lower monthly payments than rent," McCarthy says. But with off-campus housing, "they're not buying a house. They stay for one or two or four years, then they graduate, then we have a new crop of 5,000 students arriving," he explains.
As of mid-May, University Heights was already 81% leased for the fall semester. "We anticipate occupancy will be close to 100% by August," McCarthy says.
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