GlobeSt.com: Talk a little bit about how you decided to do this majority acquisition. What prompted you to move forward on it?

Harries: I've been in student housing for pretty much my entire career. And in 27 years, I've been through a lot of permutations and have been involved with companies on both ends of the student housing spectrum, from really large entities to small, entrepreneurial firms, and both on campus and off.

UCH Management Group was part of--and is still affiliated with--United Campus Holding Co., an umbrella entity I had with my partners Wayne Senecal and Daniel Ambrose. I'd been running the management company as president for UCHC for the past year and a half or so. I finally saw that with what's going on with the financial and equity markets, this economy is driving more people back to college to advance their higher education and make themselves more marketable, so college enrollments are rising.

GlobeSt.com: The downturn is helping to reshape many other segments of the market. What are the implications for student housing?

Harries:During the boom, student housing developers and operators focused a great deal on bigger, better, fancier properties with top-line amenities and features. That was great and it worked for a long time and helped to enhance the market, but now it's the same thing we're seeing in the rest of the economy--overindulging in conspicuous consumption is out of favor.

These are people that don't have the money to afford those units in the first place, and those that do don't want to spend so much in that area. Now, it's less about the amenities package and how great the features are, but more about the student experience. More students and their families are focused now on the intangibles of the college experience. It has less to do with the physical structure and features of a property and more about what you create. A lot of that comes down to how you run the property. And it gives you an opportunity to differentiate yourselves in this environment.

GlobeSt.com: So now, you can offer third-party services to other companies involved in student housing. How many beds do you manage now?

Harries: Typically of institutional investors, they acquire the portfolio and harvest the properties when it makes economic sense to do so. So at the beginning of the company, around 2001, we had about 12,000 beds. Over time, the institutional owner whittled it down through the harvesting of assets, so it was about 4,000 beds right before we exited. In a lot of ways, you could characterize us as a start-up. Letting go of that portfolio freed us up from that exclusivity, but it also brought us back to square one--we're restarting from ground zero, but with a lot of experience and talent.

GlobeSt.com: How much do you hope to grow your business in the coming years?

Harries: Size is not our issue, since our approach is to be deep rather than wide. Companies with a lot of assets might be wide, but not necessarily deep. I tend to use the word 'boutique,' though that may be underselling where we want to be a little bit. I want to be to a size where our senior team can have their hands in every deal we do. I don't want to get so big that I'm not involved with the properties and the owners. I don't want to get so big that there are several layers to go through, and you have to hand off a property or portfolio to some 28-year-old regional manager. My senior team and I want to be personally involved in everything we do.

GlobeSt.com: And that would be…?

Harries: It depends on the opportunities, and where they are. Geography has a lot to do with it. I anticipate in calendar year 2009, we'll probably pick up five or six deals, be it individual properties or small portfolios. I don't want to take on more than that because then we can't deliver our deep level of service. If someone came to me tomorrow and said they wanted me to take over 40 properties, I'd have to turn that deal down. I don't think I could deliver the level of service that we want to deliver, not that much that quickly. Perhaps down the road, but not in one lump sum.

Basically, we're trying to avoid being a commodity third-party management company. I want to be as big as we need to be to continue to provide challenges and opportunities for my team to grow and expand and to serve the people at the level we're committed to. And you don't have to be the biggest in the market to attract people.

GlobeSt.com: So what's the value of the transaction that gave you control?

Harries: I don't know. We haven't valued it because when you take on control, it isn't just about assets; it's also about liabilities. If I had to be cold and calculated, I'd value it as a start-up. The value is in the intellectual property and the potential of the team and the market. I don't know what kind of number to put on it. I believe it's priceless. I' m putting everything I have into this and staking my career and reputation on the belief that this is the right move in the right way at the right time. We're not trying to be all things to all people. But we believe we're for the right people, and we believe strongly in it. My senior team and I unanimously agree that the risks and the rewards were well balanced to move forward.

GlobeSt.com: As investors such as institutions and others who may be new entrants to the sector, do you see a growing need or preference for third-party management companies? Did that play into your decision at all?

Harries: Absolutely. At a recent conference I went to, every other person said there has to be an experienced management component to the team or the deal isn't going to be considered, let alone funded, bought or sold. Expertise is just going to become mandatory. Whether it's a small, local bank or the highest-level institutional investor, they're going to want to know who's going to run the property.

It's unfortunately a bad time for the development and lending side, but it's a good time to be a manager in this business because there is a lot of existing product that needs to be managed better, and any new product is going to need more involvement from management on the front end. There have been a lot of properties built in the last few years and some are in trouble, others may be there very soon. We hear over and over on new and existing projects, 'there must be a seasoned and motivated management company in the deal.'

We're positioned to do well. We're not trying to conquer the world; we're just trying to add some value to the right areas. I'd like to think of us as part of the solution to the distraught market, helping some of these problem assets get their heads above water.