NORMAL, IL—A student housing development does not need to look like a country club to attract investors. The Mareau Group, a Plano, TX-based company, just purchased Uptown Crossing, a 135-unit, 210-bed mixed-use student housing property located at Illinois State University in Normal, IL, for $27.6 million from a regional developer.  

And the urban infill location “does not have a ton of amenities,” Ryan Tobias, a founding partner at Chicago-based Triad Real Estate Partners, which brokered the transaction, tells GlobeSt.com. “For the most part, the amenities arms race is to make up for a property not being in a great location.”

“But this property,” he adds, “is unquestionably in this market's best location.” Originally constructed in 2010, Uptown Crossing is directly across the street from campus and will continue attracting students for decades. For Mareau, “it's not a short-term investment.”

The property features an underground parking garage, apartments on the top floors and 56,000 square feet of commercial space on the first two floors with CVS and ISU as anchor tenants. Mareau has hired Cardinal Group to manage both this asset and their growing portfolio. 

The company's principals were already experienced in the sector when they started Mareau, and this is its second student housing acquisition. Buying in the Midwest makes sense, Tobias says, since even though Texas and California have seen a lot of robust growth, properties can be a little too pricy. In the Midwest, “you get more bang for your buck.” The final sale price represents a capitalization rate of 6.75%. Still, the company's first student deal was in Columbia, SC, and “they are looking for deals all over the country.”