When Christopher Merrill first started telling potential investors ten years ago that he wanted to put their money in student housing, he raised a few eyebrows. “Some could only picture Animal House ,” says Merrill, who has been investing in real estate since 1993. But check out the $40 million property Merrill developed one block west of the University of Arizona campus. There is a rooftop pool, a fitness area and a business center–and 164 units with designer furniture, quartz countertops, stainless steel appliances and in-unit washers and dryers. The place charges $900 a month per bed, with apartments sleeping between one and five students. “Safe, well-lit, gated communities–parents won’t pay enough for that,” Merrill says. The private equity firm Merrill cofounded in 2005, Harrison Street Real Estate Capital, invests in student housing as part of a real estate strategy that is exclusively focused on demographic trends. For Millennials, dorms and student apartments are the target; for those in the “accumulation” stage of life, self-storage is a great bet; and aging boomers are driving a boom in health-care-related real estate. “These are need-based real estate investments where occupancy is not driven all by economic cycles,” says Merrill, CEO of the $8 billion (assets) Chicago-based asset manager. “One investing mistake people make in real estate is being tied to the economic cycle.”
ReplyDeleteReal Estate & FuFoon For The Ages
When Christopher Merrill first started telling potential investors ten years ago that he wanted to put their money in student housing, he raised a few eyebrows. “Some could only picture Animal House ,” says Merrill, who has been investing in real estate since 1993. But check out the $40 million property Merrill developed one block west of the University of Arizona campus. There is a rooftop pool, a fitness area and a business center–and 164 units with designer furniture, quartz countertops, stainless steel appliances and in-unit washers and dryers. The place charges $900 a month per bed, with apartments sleeping between one and five students. “Safe, well-lit, gated communities–parents won’t pay enough for that,” Merrill says.
The private equity firm Merrill cofounded in 2005, Harrison Street Real Estate Capital, invests in student housing as part of a real estate strategy that is exclusively focused on demographic trends. For Millennials, dorms and student apartments are the target; for those in the “accumulation” stage of life, self-storage is a great bet; and aging boomers are driving a boom in health-care-related real estate.
“These are need-based real estate investments where occupancy is not driven all by economic cycles,” says Merrill, CEO of the $8 billion (assets) Chicago-based asset manager. “One investing mistake people make in real estate is being tied to the economic cycle.”
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