Student Housing Investments - Campus Advantage

EXPERIENCED LEADERSHIP. CUSTOMIZED SOLUTIONS.

STUDENT HOUSING INVESTMENTS

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T H E DO M A I N AT CO LU M B I A

As the number of students enrolled at higher education institutions continues to rise, the housing deďŹ cit will continue.

Demand Gap 10.3M Students

Supply 2.9M Students

Demand 13.2M Students

During times of economic recession, conventional apartments suffer, while student housing grows due to students staying in or going back to school.

Student NOI up 11.9% Apartment NOI down 3.4%

Being in a fragmented industry allows a potential investor to participate in the consolidation and institutionalization of the industry, providing higher returns from an institutional exit.

Cap Rates

Student Housing Ownership

Individuals and Small Group Largest Owners

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CAMPUS POINTE

WHY INVEST IN STUDENT HOUSING? • • • •

High demand Resilient to recession Fragmented growing industry Higher cash yields compared to conventional apartments

Student housing is a new and highly fragmented industry that has seen an explosion of institutional interest in recent years. As student enrollment rates at degree-granting institutions continue to grow, so does the demand for additional student housing communities. According to the Department of Education, there will be roughly 14.7 million full-time students in 2021, an increase of 10.3% over 2013. As of 2012, only 22.7% of full-time students were living in dorms, resulting in 77.3% of full-time students looking for other housing options.

Student housing has proven to be very resilient in times of economic recession. People go back to or stay in school because they cannot find work and want to delay paying off student loans, leading to higher enrollment rates. From 2007 to 2010, student housing REITs increased NOI by 11.9%, whereas conventional apartment NOI decreased by 3.4%. Additionally, student housing capitalization rates generally trade 50 - 100 basis points greater than conventional multifamily housing, thus providing higher cash yields.

WHY INVEST WITH CAMPUS ADVANTAGE? • Leading privately held national platform • Over $325 million equity raised through pension fund partners • Over $1.5 billion in assets under management • Proven track record: 130 properties and 70,000 beds managed • Excellent investment return performance exceding both the NPI and IPD indexes since inception • Campus Advantage partners and clients include CalSTRS, SBAF, LaSalle Investment Management, AIG Real Estate, MSD Capital, and ASB Capital Management.

C A B A N A B E AC H

CAM PUS QUARTER S

N O R T H G AT E L A K E S

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BELMONT

Campus Advantage properties continue to outperform NPI and IPD indexes.

Campus Advantage

NCREIF Property Index - Apartment

PREA | IPD Core, Diversified Open-End Funds Results

Source: Heitman Capital

CASE STUDY: CAMPUS VIEW Campus Advantage acquired Campus View in Columbia, Missouri in March 2008 when it saw an opportunity in the 19-year-old community, which was 97% leased at the time. Managed by a conventional apartment manager, Campus View suffered from deferred maintenance, a lack of Internet infrastructure, and the ease of living associated with student housing. Upon acquisition over $2.8 million was invested in capital projects, including interior unit renovations, new furniture, wireless Internet, and various cosmetic upgrades. The resulting increases in rental rates over the next ďŹ ve years allowed the property to be sold in July 2014 having achieved an IRR of 24.8% and a 3.1x multiple on invested capital.

154%

163%

NOI INCREASE OVER FIVE YEARS

RENT INCREASE OVER FIVE YEARS

24.8% IRR

5 YEAR MASTER LEASE WITH UNIVERSITY OF MISSOURI

3.1x MULTIPLE ON CAPITAL

THE CAMPUS ADVANTAGE ADVANTAGE Campus Advantage is based in Austin, Texas, and offers a full array of higher education services including student housing development, acquisitions, and consulting and management services both domestically and internationally.

STUDENT HOUSING INVESTMENTS Campus Advantage has sponsored several joint venture partnerships and acquired over $550 million in student housing assets. We have participated in the development of more than 60 successful new student housing communities. In 2013 and 2014 Campus Advantage was the most active buyer in the student housing industry.

STUDENT HOUSING MANAGEMENT Our operations team specializes in creating an academic, social, and recreational environment where students can thrive. By maintaining each property to the highest possible standard, we are able to lease the property to maximum occupancy and at the highest rents while providing an environment that our residents love. This helps to both retain current residents as well as market the property to new residents through word of mouth.

CONSULTING SERVICES Our team specializes in a variety of areas, including demand feasibility, operational assessment, and design and programming consulting. These services are provided in conjunction with market studies and student surveys to provide a 360-degree assessment to our clients. We have completed over 200 professional consulting assignments.

MARKETING PARTNER Campus Advantage’s affiliated strategic marketing agency, Catalyst, has an award-winning, knowledgeable, and dedicated team who specializes in the higher education and student housing industries. By focusing on student-centered marketing and results, Catalyst is able to successfully target and reach our demographic with maximum efficiency.

COMMITMENT TO RESIDENCE LIFE At Campus Advantage we have the highest resident retention rate in the industry for a reason—our unique approach and commitment to residence life and student development. We set our students up for success with our award-winning Students FirstTM program.

Properties managed by CA States hosting CA consulting engagements

NATIONAL PRESENCE

According to Student Housing Business Magazine, Campus Advantage is the 6th largest student housing manager in the United States. We manage nearly 25,000 beds located on over 30 campuses in 20 states.

“Campus Advantage has overseen the operations for a portfolio of our properties…[that] were struggling with occupancy as well as operational issues. [They] were able to fully staff the property with professional staff, maintenance staff, and community assistants. Through these efforts, our portfolio reached 96% occupancy.”

—Stephen Adams, Senior Vice President LaSalle Investment Management

“The individuals at Campus Advantage are singularly focused on student housing, and their commitment to the business has made their company an industry leader.”

—Pete Fawcett, Managing Director Heitman Capital

Campus Advantage 110 Wild Basin Road, Suite 365 Austin TX 78746 Phone : (512) 472-6222 Email : investments@campusadv.com www.campusadv.com