How to target a real-estate market for investment, from the CEO of student housing giant Campus Apartments, managing properties in 17 states

David Adelman

Summary List Placement

During the current economic downturn, real estate has proved resilient.

One sector in particular that has shown stability is student housing. A survey by CBRE found that as of late June 2020, leasing velocity for the fall semester was down just 2.3% compared to the same time last year.  In fact, David Adelman, the CEO of Campus Apartments, told Business Insider that his business has been weathering the pandemic well. 

“All in all, we are a couple percentage points behind a normal year, but it hasn’t had a drastic effect,” he said.

Campus Apartments is one of the largest privately held off-campus student housing companies in the US with properties spanning across 17 states. Adelman took over as CEO when he was just 27 years old and Campus Apartments was just present in one state, and he’s expanded the company over the following 23 years. 

In an interview with Business Insider, Adelman  broke down his sourcing secrets when it comes to scouting out new locations for development. 

Assess the overall market 

Adelman explained that feeling out the market is a part of the process that applies to all real estate, student housing or not. 

Some key questions to ask include: What’s the competition like? What’s the ratio of supply to demand?

“Are they [the universities] growing, shrinking, staying the same? And what are the barriers of entry for other products being built?” 

Look for key trends in each market

Now that he has years upon years of experience, Adelman touted Campus Apartments’ ability to spot new trends in college towns before they fully develop. 

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Clemson University is a great example, Adelman said.

“We opened a development there two years ago. About seven years ago, we started seeing that Clemson was really an up-and-comer in football. What’s that have to do with anything? Well, 10 years ago and prior to that, the majority of Clemson students were in-state students, and we started seeing that as their sports programs got more national recognition, more out-of-state students were coming,” he said. 

This meant there was going to be a market for more housing, he continued.

They were right. In fact, he told Business Insider that by their first October there, the development had already been pre-leased for the following year.

Get to know your customers, for instance with focus groups 

Another thing Campus Apartments does while sourcing locations is hold focus groups with students.

In these groups, Adelman explained, the company is looking to find out things like whether or not the students are being served properly and how their product can be catered to better suit their needs. 

These groups allow Campus Apartments to figure out what students are looking for in real time. For example, it offers fully furnished apartments so students are able to avoid the stresses of a hectic move-in day.

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Source:: Businessinsider – Finance

      

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