We’ve invested roughly $6.8 million in the acquisition of Coastal Village Apartments, an existing 799-bed student housing complex in Fort Myers, Florida. The property is located near Florida Gulf Coast University and includes a large resort style pool, clubhouse, and fitness center.
Business plan
The sponsor, Coastal Ridge Real Estate, will take over management of the property and intends to bring down operating costs through the efficiency gained by utilizing their large and experienced in-house property management team. Additionally, they plan to renovate a portion of the units, which are currently at the lowest price point model, and bring them up to the highest price point model. They believe that the lack of student housing in the immediate area combined with the growing demand from Florida Gulf Coast University will drive steady increases in rental revenue over the projected life of the investment.
Our investment is structured like debt, which means that the sponsor must pay us back before they can earn a return for themselves. This provides a margin of safety while still enabling us to target an attractive return.
Why we invested
- Experienced sponsor: Coastal Ridge Real Estate is a Columbus, OH based real estate firm that specializes in the management and operations of student housing and multifamily properties throughout the US. The company currently manages more than 15,300 student housing beds and a total portfolio of real estate with an estimated value of $1.5 billion.
- Great location: The property is located within immediate proximity to FGCU, one of 12 campuses that make up the State University System of Florida. The University enrolled 14,957 in the Fall of 2017 and only provided on-campus housing for 4,748 students.
- Growing demand: Over the seven year period from 2010 to 2017, Florida Gulf Coast University enrollment grew a total of 21.26%. Over the last ten years, the annual growth of the school’s enrollment has been approximately 5.5% annually.
