ANN ARBOR, MI—Affiliates of SmartStop Asset Management, LLC just acquired 411 Lofts, a 90-unit, 345-bed purpose-built student housing community located three blocks from the University of Michigan in Ann Arbor for $43.8 million.
“We've been looking at the market for about a year-and-a-half,” John Strockis, senior vice president of acquisitions for SmartStop, tells GlobeSt.com, and 411 Lofts looked like the perfect opportunity. “It is within one of the best, Tier 1 research universities in the country, and it is just three blocks from campus.” Built in 2009, the amenity-rich community was professionally managed, but with rents that were lower than comparable class A units nearby. “Everything lined up nicely.”
The Ladera Ranch, CA-based SmartStop has deep roots in the self-storage sector, and felt investments into student and senior housing fit well into its overall strategy. “These asset classes are all on solid footing,” says Strockis, and can generate returns over the long-term. Each is resistant to recessionary pressures, and the student population is set to grow right along with the nation's senior population.
A 10-story building, 411 Lofts has fully furnished one-, two-, three- and four-bedroom units ranging in size from 400 square feet to 1,187 square feet. The property features security controlled access to units and bedrooms and underground parking. Additional amenities include a 24-hour fitness facility; 10th floor resident sky lounge; a computer center with iMacs, PCs and printers; study rooms; free common area washers and dryers; 500 Mbps Internet bandwidth with Wi-Fi hot spots; onsite restaurants; and a tanning room.
Students currently occupy 98% of the property, and the pre-lease rate for the 2018 – 2019 academic year has already hit 53%. At this time last year, Strockis says, it was 42% pre-leased.
“Management has done the right thing and reached out to the right students,” he adds. Many of the students at 411 Lofts major in one of the STEM fields, a sign that “they take schooling very seriously.” They are more likely to use the provided amenities as a way to become more productive and create a real community with like-minded peers.
Asset Campus Housing, one of the nation's premier third-party student housing managers, will manage the community.
SmartStop now has about $1.3 billion of real estate assets under management, including 109 self-storage facilities located throughout the US and Toronto. Including 411 Lofts, it has bought four student housing communities in the last 13 months, Strockis says, and will soon close on a fifth.
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
