INVESTMENT STRATEGIES |
INVESTMENT THESIS: STUDENT HOUSING
Increasing college enrollment has been one of the most dominant social trends of the last 50 years, as the growth in service sector and knowledge-based employment has created demand for a more skilled workforce. In 1970, 35% of all 18-24 year olds were enrolled in a four-year university. In 2009, that number grew to more than 60%. This increased emphasis on higher education has led to an average annual enrollment growth of more than 2% for the last 40 years, despite fluctuations in the size of the college-aged cohort and varying economic conditions.
Our student housing investment strategy aims to create stable cash flow streams that weather various economic conditions. Student housing is often touted as being "market neutral" because the primary demand driver is enrollment, rather than job creation as in most other real estate classes. While there is truth to this theory, certain student markets perform better in turbulent economic environments than others. We carefully select our investment markets according to the three primary factors that impact how well a school's enrollment is likely to hold up during economic downturns:
Size | Larger schools with diverse student populations, a thriving social scene, and strong sports programs tend to provide a more attractive "college experience" for students.
Academics | Reputable schools with the highest academic rankings attract more applicants and are rarely under-enrolled.
Cost | When finances tighten, both in households and in available tuition assistance programs, students are more inclined to pursue lower cost institutions. Many students' only option is to stay in-state and forgo more expensive out-of-state or private institutions.
INVESTMENT CRITERIA: STUDENT HOUSING
CGI targets valued-added off-campus student housing communities in markets with large flagship institutions that provide a high quality education and competitive tuition. We prefer undermanaged properties with curable physical, management or capitalization deficiencies.
Size | 100+ units / 400+ beds, $10+ million
Location | Within one mile of campus. Ideally within walking distance of both campus and the commercial or entertainment district, or with bus service.
Target Markets | Universities and Colleges in major conferences with 10,000+ students.
INVESTMENT STRATEGIES |
INVESTMENT THESIS: URBAN INFILL
CGI's urban development and investment strategy is focused on creating unique multifamily and mixed-use spaces for residents to live and shop. In many cities, the existing urban housing stock is old and obsolete, or new and bland. We seek to bridge that gap by redeveloping assets into compelling urban communities that are efficient, innovative and interesting. This product type targets the two largest demographic segments – the Baby-Boomers and Echo-Boomers. Both of these demographic cohorts are upwardly mobile and are increasingly gravitating toward walkable urban neighborhoods in cities with rich cultural amenities and robust job engines.
INVESTMENT CRITERIA: URBAN INFILL
We focus on developing ground-up or acquiring existing underperforming multifamily and mixed-use assets, and repositioning them through rehabilitation, entitlement, management and marketing. We target markets with: high barriers-to-entry, walkable urban neighborhoods, in close proximity to mass transit systems, entertainment and retail hubs, and an educated workforce.
Product Type | Multifamily and Mixed-Use
Size | 75+ units, $10+ million
Target Markets | Austin, Chicago, Denver, Los Angeles, San Diego, San Francisco Bay Area, Portland, Seattle