Student Quarters
Student Quarters
2013
—
Atlanta, GA
Georgia
Student Housing
Student Quarters Reviews
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Successful Exit Despite Significant Cost Overruns
I invested with Student Quarters (SQ) in a new student housing project located in Columbus, Ohio, close to the OSU campus. The investment was projected to deliver 7% cash-on-cash returns, but it underperformed. Actual distributions averaged approximately 2%. The sponsor did not correctly anticipate competition from other student housing developments or the changes in student enrollment dynamics. Additionally, the project's operating expenses were significantly underbudgeted. After a four-year hold period, the sponsor exited the asset at a 1.2x equity multiple and a 5.9% IRR. While these results were below original expectations, it's a small profit during a period of significant challenges for the commercial real estate market. SQ delivered consistent and clear quarterly reports throughout the investment. I credit the sponsor for executing a timely exit that preserved investor equity and generated a gain despite the market headwinds. I do not plan to invest in the student housing market again.