Inland American Buys Student Housing in Fort Worth

Inland American Communities has purchased The VUE, a high-end student housing property one block from the Texas Christian University campus in Fort Worth.

Inland American Communities has purchased The VUE, a high-end student housing property one block from the Texas Christian University campus in Fort Worth, Inland American announced Thursday. (The actual closing took place the previous day, an Inland spokesperson told Commercial Property Executive.) The purchaser is a wholly owned subsidiary of Inland American Real Estate Trust Inc., of Oak Brook, Ill.

The property, which reportedly had opened in August 2012 at 100 percent occupancy, will be rebranded as a University House community. Financials on the transaction were not disclosed.

The four-story, 118-bed property features high-quality finishes and also includes 6,000 square feet of retail space that’s currently in buildout and projected to open this spring.

“The VUE … meets our core investment objectives with best-in-market amenities, serves a well-known university with growing enrollment, and is in the right location,” Travis Roberts, president of Inland American Communities, said in a press release.

The property joins eight others under Inland American’s University House banner; the line comprises properties at the University of Pennsylvania – Philadelphia; University of Florida – Gainesville; University of Louisiana – Lafayette; University of Alabama – Birmingham; University of Central Florida – Orlando, Sam Houston State University, Huntsville, Texas; North Carolina State University – Raleigh; and Florida State University – Tallahassee. In addition, University House developments are under way at the University of Oregon – Eugene and California State University – Fullerton, both of which will open later this year.

CBRE assisted in the TCU transaction. Jaclyn Fitts, associate director of CBRE’s National Student Housing Group, told CPE that The VUE is achieving average monthly rents of more than $1,000 per bed, on a 12-month lease basis. In general, she explained, there’s strong investor demand for high-end properties within walking distance of campus.

Nationwide, she said, student housing transaction volume hit a record $3.7 billion in 2012, driven by two large portfolio transactions by American Campus Communities. Much of the interest, Fitts said, is coming from multi-family investors that see they can get better yields from student housing. She noted, though, that student housing is more difficult to manage than multi-family and that with a once-a-year lease-up, it’s very difficult to backfill to boost occupancy.

Though the student housing market remains strong, Fitts cautioned that an estimated 38,000 new units will be delivered nationally before the start of the 2013–14 academic year. Still, she emphasized, any concern about overbuilding is very much on a market-by-market basis.