Homestead U Featured in Columbus Business First

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How We…

Built stable business with college kids

Homestead U’s housing nearby universities represented an untapped market

By Jeff Bell

Q&A – Read it on Business First Website (Available to non-subscribers on 1/25/15)

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Formica_2Laura Formica likes to tell the story about the first time that Homestead America Founder and President Dave Anderson called her about joining his company’s fledgling student housing division in 2012.

Called Homestead U, the business had been launched in 2011 with the acquisition of the 1,008-unit University Village apartment complex near Ohio State University. More deals were in the works on properties near Ohio University, the University of Arizona and Texas Tech University.

“Dave was sitting by the pool in Arizona and said to me, ‘you should see how these college kids live,’ ” Formica said. “He was so excited his company was branching into student housing.”

Anderson’s enthusiasm was justified. Today, Homestead U has grown to 3,700 units with more than 7,000 beds for college students. It also is targeting additional properties in the Midwest and Southwest.

Homestead U is a division of Columbus-based Homestead America, a full-service commercial real estate management company that specializes in apartment communities. Working with Santa Monica, Calif.-based equity partner Columbus Pacific Properties, the company has created a student housing division that focuses on adding value, such as shuttle bus service and social programs, to apartment complexes it owns and manages.

Formica, 31, joined Homestead U as Marketing Director in July 2012 and now serves as Vice President of Operations. Here are highlights from her recent interview with Columbus Business First.

What’s the multifamily housing market like today in Central Ohio? Booming – there is an unprecedented amount of development that’s taking place. Since 2011, there have been a total of 13,000 units slated to come online, and 5,000 of those are with the downtown area and adjacent neighborhoods. So you’ve got a ton of development happening in the center of the city and also a lot of development in Hilliard, Polaris and New Albany.

Why did Dave Anderson decide to create Homestead U in 2011? The operations of  student housing are different than conventional (apartments), so it made sense to branch out. On a big-picture level, he saw an opportunity in student housing, which is a sector of the industry that was not oversaturated  with investors, capital rates were really low, lenders were very friendly and there was not a lot of competition. It was a sky’s-the-limit kind of opportunity.

On the face of it, owning and managing apartments that are rented to college students looks like a risky business. How do you mitigate and manage that risk? Obviously students, not all but some, can be a little harder on the apartments. But it’s like any other typical apartment lease – you charge back for damages and you factor that into your costs. You’ve always got standard wear and tear, and some people are harder on the units than others. We also require co-signers with the student housing we manage. When you’ve got sand and mom on the hook, it becomes a lot easier to collect the rent and on any damages.

Tell us about the process of finding the right property at the right location? The biggest thing for us is that we look at the university. Is it a tier one school? Is enrollment growing? You also look at (apartment) development in the space – what the supply and demand looks like. We also really look for value – add opportunities. Maybe (a property) has some deferred maintenance issues and doesn’t have a robust resident life experience and no social programming. Maybe it’s a little farther from campus and (residents) need transportation, so we look at providing a shuttle service. Overall, we look to grow the value of the asset, improve the property and raise rents.

What have been the keys to the fast growth of Homestead U division? Going from 1,800 beds to more than 7,000 beds in three years has been quick to say the least. We couldn’t do it without Columbus Pacific, our equity partners. They make it possible to move forward on these deals and manage these properties. That being said, from where I sit it’s our team of people, who are just incredible. Our strategy when we hire is that you have to have that entrepreneurial spirit and you have to be ready to adapt and be open to changing roles, sometimes on a daily basis. That’s really the key. You may just have to roll with it.

What’s been Homestead U’s experience with University Village in Columbus? We acquired that property in 2011, and it’s been 100 percent occupied every year. It was built in the 1950s and had been owned and managed by the same company for a very long time. it had been impeccably maintained, and we inherited a really great (management) team. It had the challenge of not being the newest kid on the block, but they had built a really solid brand…and it continues to perform well.

Where do you see Homestead U five years from now? I know the partners have very aggressive goals for growth. I would love to be sitting here five years from now at 20,000 beds on a national level. That would be amazing, and think it’s realistic. But it depends on the economy, (interest) rates and the kind of value – add opportunities that fit our niche. It’s also dependent on the number of investors that enter the student housing space. We’re seeing more and more, so it also depends on how saturated and competitive (the market) becomes. We’re in a great position. We’re focused on building a brand and a culture that our properties are identified with in Homestead U. As long as we continue to find deals that provide a great return and are in our wheelhouse, we’re going to keep moving forward.

 

 

 

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The 2014 CEO Summit

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The event went off without a hitch; each presenter was well-prepared, each session informative and motivating, and there was a lot of great team-building and bonding time built in throughout.  That being said, the participation and collaboration put forth by the attendees was more than I could have hoped for.  We have a very solid group of smart, driven CEO’s who all have a very bright future with Homestead U ahead! I’m looking forward to the 2015 leasing season and the success that is sure to come. – Laura Formica

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HAHU Marketing Promotions

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It’s a great time to be part of the HAHU family as we gear up for more growth on both the student housing and conventional sides of our business.  With such rapid and exciting growth comes new opportunities and challenges.  We are proactive in addressing these challenges and making the necessary changes to overcome them.  I am excited to announce that HAHU is restructuring at the corporate level and would like you to join me in congratulating the following team members on their new role within the company:

Laura Formica has been promoted from National Director of Marketing to Vice President of Operations.

Ryan McGahan has been promoted from Marketing Specialist to Marketing Manager.

Ben French has been promoted from Marketing Specialist to Web & Marketing Administrator.

Michelle White has been promoted from Accounts Payable Clerk to Operations Administrator.

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HAHU would also like to extend a warm farewell to Cheryl Bean who has resigned from her position as HAHU’s Operations Manager to pursue an opportunity as Regional Manager for T&R Properties.  Cheryl’s last day with us will be Tuesday, August 13th.  We wish Cheryl all the best as she continues to grow her career in property management.

I thank you for your continued loyalty and support as we again take Homestead America and Homestead U to the next level.

-Dave Anderson

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Homestead U Gives University Village a Makeover

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–How OSU’s landmark apartment complex is upgrading the resident and leasing experience –

 Columbus, OH (February 8, 2013) University Village has undergone a major renovation of their office headquarters at 505 Harley Drive.  The leasing office, models, entryways and hallways, fitness center, computer lab and tanning room all have a fresh new look.

“We wanted something new and modern, to reflect the energetic, dynamic personalities of not only our onsite team, but of our residents as well,” says Laura Formica, Director of Marketing for Homestead U.  Today’s students are much more aesthetically inclined, and we wanted our décor to reflect that in a really fun, cool way.”
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Athens Messenger – Improvements scheduled at Athens apartment buildings

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Athens Messenger

Improvements scheduled at Athens apartment buildings

Posted: Thursday, July 12, 2012 5:50 pm | Updated: 4:26 pm, Tue Jul 17, 2012.

By STEVE ROBB Messenger staff journalist

Tenants of two student apartment complexes will be able to swim up to the bar for a drink once upgrades planned by the new owner are complete.

As The Messenger reported Thursday, Columbus Pacific Properties of Santa Monica, Calif., has purchased the Riverpark Towers, River’s Edge and Athens Apartments for nearly $40 million. The primarily student housing properties will be managed by Homestead America of Columbus.

Laura Formica, spokeswoman for Homestead, said the plan is to treat Riverpark Towers and River’s Edge, which are adjacent to one another, as one complex and to make about $500,000 worth of improvements — including construction of a pool with a swim bar.

“It’s really going to be treated as one community,” she said.

Upgrades also will be made to the fitness center, corridors, leasing office, laundry facilities and computer center, giving the center a “coffee house feel,” said Formica, who is an Ohio University graduate.

“We recognize there is great potential for the property,” she said, adding that the goal is to create something “real cool and modern.”

No physical changes are planned for Athens Apartments.

Asked if rental rates will be increased, Formica said no immediate increase is planned. However, she said rates will be consistent with the market, which is seeing slight increases.

Homestead America also manages University Village — also owned by Columbus Pacific Properties — near the Ohio State University campus.

The Athens properties were sold by companies affiliated with Klingbeil Capital Management. Klingbeil built River’s Edge, but had purchased Riverpark Towers and Athens Apartments.

Klingbeil President James Callard said an investment fund was created for the Athens assets, with the money invested for a specific number of years. The life of the fund had come to an end, and a distribution was owed the investors, he said.

“It was just time,” Callard said when asked the reason for the sale.

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Columbus Business First | Homestead U expands student housing holdings with purchase in Tucson

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A Columbus-based owner and manager of off-campus student housing has acquired its second apartment complex in Tucson, Ariz.

Homestead U purchased the 336-apartment Reserve at Star Pass for its investment and management portfolio. The property is less than 6 miles from the University of Arizona, with an enrollment of about 40,000.

Homestead U and equity partner Columbus Pacific Properties of California paid seller Education Realty Trust Inc. (NYSE:EDR) $25.5 million for the student housing complex. The 12-year-old property includes 1,020 beds for students but has a “distressed” occupancy level at 65 percent.

“It’s a beautiful property,” said Laura Formica, Homestead U’s national director of marketing. “It’s been well-maintained.”
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