Project name
Campus Edge (FULLY FUNDED)
Location
950 Hudson Road, Marietta, Georgia, USA
Initiator
REALIANCE USA B.V.
Local partner
Property manager
In-house: Campus Life & Style/Asset Campus Housing
Category
Student housing development 202 units, 553 beds
Expected investment term
Five years (two years development and three years of operation)
Exit strategy
Sale to an end investor or restructure as a long(er) term hold
Total investment
US$ 72,650,000
Bank loan
US$ 47,222,500 (65% Loan to Cost)
Equity Project LP US$ 25,427,500
Of which:
T2 Investments US$ 3,114,869
CRA (local partner) US$ 5,784,756
Alphahill entity (German investors) US$ 3,000,000
Campus Edge Capital LP US$ 13,527,875
Amounts may vary
Equity in Campus Edge Capital LP US$ 13,825,000
Participation in Project LP US$ 13,527,875
Costs Capital LP US$ 76,379
Placement fee US$ 220,746
Investment pre-development
US$ 18,000,000
Bank loan
US$ 9,000,000
Equity Project LP US$ 9,000,000
Of which:
CRA and T2 Investments US$ 4,500,000
Campus Edge Capital LP US$ 4,500,000
Structure
Direct participation in Campus Edge Capital LP
Projected gross total return
88.1% over five years (7% for pre-development over 6 months)
Projected gross return
17.6% ROI per annum (14% for pre-development)
Distribution (per annum)
7% from the first year of operation and upon sale
Unique selling points
The investment in Campus Edge offers investors the opportunity to invest together with experienced local partners in a value-add (development) proposition with the development of a high quality purpose-built student housing property. The last three projects with the same partners (The Gates at Valdosta, The Beacon and The Edge at UWF) generated an annual gross return of 29% and 13.5%. The student housing portfolio performs operationally well and valuations are relatively strong.
An investment in student housing is less cyclical because this category is less dependent of economic developments. A relative low LTV/LTC and acquisition price in combination with conservative assumptions mitigate risk. REALIANCE investors will hold the largest ownership share in the real estate entity.
Both CRA and T2 Investments participate in the project entity for a total share of 35% of the equity. Besides that, the site is 10 minutes away from CRA’s office.
Unique selling points for this investment proposition are:
- The Marietta Campus student population has grown by 38% since 2017, with 16,425 (+6%) students enrolled in the fall of 2024.
- This is currently the only development of an off-campus purpose-built student housing property, and directly next to Kennesaw State University (KSU) Marietta Campus. In addition, there are limited suitable plots available (CRA worked on several deals for years).
- Private pedestrian access to campus via a dedicated easement, within 500 feet of key academic buildings.
- Total student housing shortage in this submarket is 5,847 beds.
- The Beacon, one of the star performing properties in the combined portfolio of REALIANCE and CRA, is located at the other side of campus and serves the same undersupplied market. The design and execution will be very similar.
- The current student housing property on this plot will generate income to cover operating expenses up until the start of demolition.
- Coastal State Bank has committed a loan for both the acquisition/pre-development as well as for the development.
- Due to the attractive purchase price of the current outdated property, affordable rents can be charged after delivery. Pro forma rents after completion are only 6% higher than current realized rents at The Beacon. In two years, rents at The Beacon are most likely similar, which gives Campus Edge upward potential.
For more information you can reach REALIANCE at +31 (0) 20 21 03 180 or invest@realiance.nl.
