Acquisitions workflow at Student Quarters

Acquisitions Workflow

What goes into purchasing and closing a deal?

With 8 strategic acquisitions and 5 successful dispositions in 2022, Student Quarters has not only expanded but also created new opportunities for our teams. In 2022 alone, we closed 13 deals and entered 4 new markets, expanding our footprint and solidifying our position among the top 25 Student Housing Owners and Managers. Our remarkable rise from 23rd place in 2021 to 16th place in 2022 is a testament to our dedication and expertise in the industry. Join us as we explore our journey of growth and the strategies that have propelled us to new heights in the world of property management.

In the dynamic world of student housing, the acquisitions workflow is a critical process that property management professionals must master to identify and secure lucrative investment opportunities. From building market knowledge to closing the deal and initiating handoff, each step plays a vital role in ensuring a successful acquisition. Through this introduction, we will explore the key stages of the acquisitions workflow in student housing, providing valuable insights for industry professionals.

Building and Maintaining Market Knowledge:

The foundation of a successful acquisitions workflow lies in developing a deep understanding of the student housing market. This involves researching and analyzing market trends, local demographics, and demand-supply dynamics. At Student Quarters, we use many platforms to track and analyze this type of data like Axiometrics, Trajectory, and CollegeHouse. By monitoring rental rates, occupancy levels, and emerging student housing markets, the Student Quarters acquisition team can identify potential areas for investment.

Sourcing the Deals:

Once market knowledge is established, the next step is to actively source potential acquisition opportunities. This includes networking with industry contacts, building relationships with brokers, seeking off-market opportunities, and leveraging digital platforms to identify available properties. Engaging with brokers, developers, and other industry stakeholders can provide valuable insights and access to off-market deals. (Opportunities can come from anywhere!)

Filtering Opportunities:

With a plethora of opportunities available, it is crucial to filter and evaluate potential deals efficiently. This involves setting specific investment criteria and conducting preliminary due diligence. Student housing owners and operators must assess factors such as location, property condition, financial performance, market reputation, and alignment with investment objectives to determine which opportunities warrant further consideration.

Underwriting – Under a Microscope:

Underwriting is a meticulous process that involves conducting comprehensive due diligence on shortlisted properties. This includes analyzing financial statements, rent rolls, lease agreements, property inspections, and market comparables. Acquisition teams must evaluate revenue projections, operating expenses, and potential risks to accurately assess the investment’s viability and potential return on investment.

Deal Awarded – Property and Operations Due Diligence:

Upon successful underwriting, the deal is awarded, and the focus shifts to conducting property and operations due diligence. This stage involves thorough inspections of the property’s physical condition, identifying any maintenance or repair requirements, assessing regulatory compliance, and reviewing property management contracts. Additionally, understanding the property’s operational aspects, including marketing strategies, tenant retention rates, and current occupancy levels, is essential for a comprehensive evaluation.

Deal Awarded – Capital Stack:

Simultaneously with property due diligence, attention must be given to the capital stack. Property management professionals collaborate with financial partners, such as lenders and investors, to secure the necessary financing for the acquisition. This involves negotiating loan terms, assessing the financial feasibility of the investment, and finalizing the capital structure of the deal.

Deal Awarded – Closing and Handoff:

Once property and operations due diligence is completed, and the capital stack is secured, the deal moves towards closing. This involves finalizing legal documents, coordinating with legal counsel, and addressing any outstanding issues. The handoff process includes transferring ownership, updating property management systems, and ensuring a seamless transition for tenants, staff, and operations. After everything is said and done at Student Quarters, the (literal) bell in the upstairs office is rung.

The acquisitions workflow in student housing requires a systematic and thorough approach to identify, evaluate, and secure investment opportunities. By building and maintaining market knowledge, sourcing deals, filtering opportunities, conducting comprehensive due diligence, finalizing the capital stack, and successfully closing the deal, student housing owners and operators can navigate the acquisitions process with confidence. A well-executed acquisitions workflow is essential for achieving success in the dynamic and rewarding world of student housing.