Multifamily REITs Go Beyond the Core

NEW YORK CITY-While strong fundamentals, rising rents and attractive construction costs are all driving the boom in the multifamily market, many residential real estate investment trusts are beginning to seek out opportunities beyond traditional core markets.

During NAREIT’s REIT Week Investor Forum on Tuesday morning, William C. Bayless, Jr., president and CEO of Austin-based American Campus Communities, Inc., a student housing REIT worth $4.8 billion, said privatization of on-campus student housing is becoming a new trend in the industry, even among major public institutions and the Ivy League. “It has become mainstream,” he said. “When you think of colleges and universities looking toward the private sector for assistance, historically, the Ivy League and premier flagship institutions were very proud of their own internal abilities in terms of delivering real estate and capital assets. And that has evolved, given financing limitations. Even the wealthiest institutions have said, if there are companies that have a core competency that can help us deliver better market-based products more cost-effectively and more efficiently, then we should not waste our own precious dollars.”