Investment Thesis
13 Years in the Making
1. Sector Strategy: Student Housing Lower risk product that has proven to be a more resilient investment than other asset classes. Battle-tested against the last 4 recessions, including global pandemic 2. Sector Tier Strategy: Tier 1 - Power 5 Conference Universities Lower risk tier of best-in-class educational institutions with lower acceptance rates resulting in ability to manage economic turbulence. UC Berkeley admitted only 11.6% of 125,910 applicants in 2023-2024 school year¹ 3. Sub-Market Strategy: University of California, Berkeley 1. As the #1 Best Public University in the World, Berkeley is one of the most competitive student housing markets in the country with a growing student population of 45,699². 2. UC Berkeley has the greatest housing shortage of all universities within the University of California system. UC Berkeley only houses approximately 22% of its students in 2023. 3. Berkeley has the most favorable topography and geographical conditions for private operators relative to other campuses. 4. Neighborhood Strategy: Highly pedestrian radius to UC Berkeley campus Highly pedestrian and premier location demands premium rents. Every year, ~80% of UC Berkeley’s student body must secure off-campus housing, providing a built-in demand generator and ensuring high occupancy rates and consistent rent growth for the closest properties surrounding campus. Source: (1) Admitted Rate Data sourced from UC Admission: https://admission.universityofcalifornia.edu/campuses-majors/berkeley/freshman-admit-data.html (2) Enrollment Data source from UC Berkeley: https://pages.github.berkeley.edu/OPA/our-berkeley/enroll-history.html 7-tier niche strategy generating above-market risk-adjusted returns to accredited investors.
5. New Product Strategy: New Construction and New Redevelopment Due to a lack of on-campus housing options, there is a fierce competition for housing in general. There is an even fiercer competition for new or quality housing product. Our strategy is to focus on separating us from the competition by providing the highest quality product while staying affordable relative to on-campus housing options. 6. Demographic Strategy: Non-Freshmen Students We target the 70% highest affluency of off-campus student residents, primary upper classmen, transfers, and graduated student, which represents roughly 9,000 out of 45,699 students which includes 2,700 international and 6,300 Out-of-State students in 2023-2024². 7. Platform Strategy: Local Operational Scale & Vertically Integrated Management Platform Student housing is a highly management intensive product type. We built our in-house property management firm to specialize in only student housing around UC Berkeley to provide the best experience to our residents and communities.
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