THE RIDGE PROPERTY
The Ridge is situated less than one mile from West Virginia University in Morgantown, WV. This investment provides a perfect opportunity to acquire a property at a Tier one University in the Big 12 conference. The fully amenitized property was built in 2002 and has an outstanding location and legacy within the WVU market.
Although the property was nearly 100% occupied for the 2016-2017 academic year, it has experienced a slower leasing velocity and lower current occupancy at 77 percent for the 2017-2018 academic year. As pockets of the national student housing market begin to mature and go through peaks and troughs we believe The Ridge presents itself as a value centric investment opportunity.
Mark Twain’s investment advice was, “Buy a stock and sell it when it goes up. If it doesn’t go up, don’t buy it.” NB Private Capital is not Mark Twain so our approach is not foolproof but we do agree that buying low helps investment returns in the long run. We believe the acquisition price is relatively low compared to what the property value could potentially be using our operational strategy that we have in place over the next couple of years if enrollment begins to climb.
The Ridge is currently being priced at around $23,000 per bed which is about half of what the average price per bed was in 2017 for national B/C student housing transactions. It is also the lowest price per bed compared to the most recent sales comparables. This is why we believe this property to be the most compelling in location, cleanliness and amenities it has to offer.
We believe as the market continues to improve,we will invest in the property providing minor cosmetic upgrades to improve its competitiveness and potentially drive rents higher. Over time, these improvements can potentially bring back the property’s valuation to be in line if not more than the comparables.