TIAA-CREF Shooting for $600M in Student Housing

TIAA-CREF isn’t new to the student housing game, but the mega financial services org is making its first investments in purpose-built, highly amenitized student housing assets. The firm expects to close about $115M in transactions by year-end and acquire $300M to $500M or more in 2016.

TIAA-CREF Global Real Estate senior director Mike Schwaab, who is heading the student housing acquisitions, tells us two acquisitions have been made year-to-date: 33 North (427 beds) near the University of North Texas and The Lodge at Purdue University (576 beds in a JV with Pierce Education Properties). Mike says TIAA-CREF wants locations that are walking distance to campus, athletic facilities and/or entertainment districts. Proximity to an established transportation line may be an option in some markets but in general, the closer to campus, the better. He tells us they focus on the university. That means the locations include primary, secondary, tertiary and even rural markets. 

Student housing can offer diversification—including location, demand drivers and event risk—and attractive yields compared to other multifamily assets, Mike says. But asset selection is key considering there are more than 4,700 post-secondary degree-granting institutions in the US. TIAA-CREF has a larger appetite for stabilized core assets but will also look for value-add repositioning opportunities, which may include properties that are undermanaged, undercapitalized or under-occupied, he tells us. The target: privately owned, purpose-built and leased by-the-bed student housing. Large public universities top the list because of their relative affordability and transparency on housing policy, he adds.