Preiss Expands Texas Footprint
- May 28, 2015
By Gail Kalinoski, Contributing Editor
The Preiss Co. has expanded its student housing holdings in Texas with the acquisition of the 486-bed Outpost San Marcos serving students at Texas State University.
The price was not released. It is the second acquisition made this year in joint ventures with Criterion Holdings L.L.C. of Baltimore as the general partner and a separate private investment group. The team picked up The Vista, a 286-bed property located across from the University of Denver in February.
“This is our first property at Texas State, although we have been in Texas for eight years and this acquisition will bring us to nearly 4,000 beds in the state,” Donna Preiss, founder & CEO of the Raleigh, N.C.-based student housing owner-operator, said in a news release. “We are pleased to have purchased this stabilized asset serving a university that has exhibited growing enrollment. Texas State grew 3.4 percent last year and the Outpost continues to perform higher than expected in terms of pre-lease velocity and rental rate growth.”
With more than 36,000 students, it is the largest educational institution in the Texas State University system.
Located on 11.2 acres, the student housing complex consists of six three-story buildings and a clubhouse. It is within walking distance to the football stadium and approximately seven minutes from the campus via car or the university’s public transportation system. The new owners plan to upgrade the facility including adding a large study/computer room to the clubhouse and improving Internet connectivity and speed. New fitness equipment and pool furniture will also be added.
“Less than 15 percent of students live in University-owned housing, creating high demand for quality housing,” Preiss said in the release. “This is a great addition to our expanding portfolio.”
The company, the nation’s third largest, privately held student housing owner-operator, owns three other complexes in Texas, all three serving the University of Texas at Austin. It currently has 45 managed sites in 14 states and 23 markets.
“We continue to target quality assets where we see upside by adding value through strategic investment, strong marketing and focused, hands-on management,” Preiss said in the prepared statement.
In January, it acquired Orion on Orpington, a 624-bed student housing community in Orlando near the University of Central Florida. That purchase was made in a joint venture with a private investment group from Orlando Student Venture L.L.C., an entity affiliated with Investcorp.
Colliers International’s Student Housing Group reports that student housing was an attractive asset for both investors and developers in 2014 and that positive trends should continue this year. In its 2014 Student Housing Year in Review, the Colliers group reported that Texas had the most deliveries in 2014 with eight projects completed at a cost of $130 million. For this year, New York currently has the biggest student housing pipeline with eight developments expected at a combined cost of $97 million.
“While the number of new beds expected to come on-line in 2015 is less than 2014, occupancy is increasing and pre-leasing for the 2015-2016 school year is firm,” the Colliers report stated.