Three-Property Student Housing Repositioning Project

Austin, Texas

Three-Property Student Housing Repositioning Project

Austin, Texas

Assets:

  • Over the course of two years, Nimes Real Estate acquired a student-housing portfolio comprised of five adjacent assets with 1,300-units/3,700 beds.
  • Comprised approximately 100 contiguous acres located just southeast of downtown Austin, directly in the expected future path of gentrification.

Investment strategy:

  • A value-add opportunity achieving attractive cash-on-cash returns during the hold period with a redevelopment upside on exit value.
  • Attract University of Texas students who had been priced out of downtown due to Austin’s explosive growth, but who could afford rents significantly higher than those historically achieved at these assets.
  • Upgrade unit interiors and common area amenities to maximize cash yield during our hold period until monetization via redevelopment opportunities.

Outcome:

  • The path of progress we envisioned arrived rapidly, caused land values to climb drastically.
  • To maximize value, Nimes undertook rezoning of all of the assemblage.
  • Nimes monetized three of the assets with a developer with whom Nimes continued to jointly entitle all five sites–further enhancing the value of Nimes’ retained holdings.
  • This portfolio returned over 200% of total invested equity in the first 3.5 years after the acquisition of the first asset.

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