AUSTIN, TEXAS — More than 1,300 attendees gathered last week for the 14th annual InterFace Student Housing Conference, where the sector’s resilience during the pandemic and bright outlook for 2022 and beyond dominated the conversation. This was particularly true during the event’s opening Power Panel, which brought together a consortium of high-level executives, including Timothy S. Bradley, founder of TSB Capital Advisors, to discuss industry trends and the outlook for the upcoming academic year.
In addition to Bradley, the panel featured Avi Lewittes, chief investment officer with The Scion Group; Wes Rogers, president and CEO of Landmark Properties; Nick Porter, founder of Global Student Accommodation; Bill Bayless, CEO at American Campus Communities; Marc Lifshin, founder and CEO of Core Spaces; and moderator Peter Katz, executive director with Institutional Property Advisors.
Real Estate Business Online and Student Housing Business magazine reported on the panel, noting that with so much pent-up demand for investment activity comes the question of financing and its availability within the current landscape.
“We still have a very liquid market and our business is currently as institutional as it gets,” said Bradley.
“There is a lot of paper in the market, and as the CMBS market blew up over the past 60 days, where did it go? Banks,” he continued. “Around 90 percent of our financing this past year was bank financing. With fixed rates going up between 4.75 percent and 5 percent, we haven’t seen the shift to core assets taking a discount. There’s just so much capital trying to get into the space right now.”
But the debt markets are still liquid, according to Bradley, and the process just takes a great deal longer.
“We have to add an additional two weeks on top of what we initially would’ve seen when we submit opportunities and financing requests to lenders, whether it be life insurance companies, banks or debt funds,” said Bradley. “We think we’ll continue to see a lot of liquidity on the debt side, and with long-term curves going where they are, the conversation is focused on how to hedge deals.”
Turning to construction financing, Bradley noted that it is available, but what you’re able to get boils down to sponsorship and experience. “Delivery is the most critical component with student housing, and it has weeded people out of our business to the point where we think people have learned,” he said.
Visit Real Estate Business Online for more information on the panel and the overall conference.