Industrial Is On The Brink Of Overbuilding

For a stock market investor looking to buy into the student housing sector — much like a college student who procrastinated finding an apartment for the fall semester — there could soon be no more options. 

That’s because American Campus Communities, the lone publicly traded student housing REIT in a segment that five years ago had three such companies, is set to be acquired by Blackstone in a deal announced in April and expected to close this quarter. 

This deal is part of a larger wave that has accelerated over the last year of public REITs being taken private by investment giants, as tens of billions of dollars have flowed into funds operated by firms like Blackstone, Starwood and KKR. The stock market downturn has made these deals more attractive for buyers because REITs can be acquired at a relative discount to the private market value of their portfolios. 

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In Case You Missed It...

Nitin Chexal, the CEO of Austin-based Palladius Capital Management, thinks Chicago isn’t getting a fair shake. 

His firm is a contrarian investor, lender and manager that launched a year ago. It has since acquired more than $915M in multifamily, student housing and industrial real estate in Texas and Chicago. Chexal said the Windy City is getting a bad rap in the press over property taxes and crime, but there are still opportunities for smart investors.

Palladius does most of its deals off-market in cities it thinks are being overlooked by institutional money, and it launched its first fund via a $15M Series A, an unusual method for a real estate investor to capitalize. It has partnered with RealtyMogul to accept accredited investors via crowdfunding into its inaugural fund.

Prior to starting Palladius, Chexal worked at Nimes Real Estate, med-tech firm Counsyl and on the real estate team at Marathon Asset Management.

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