Newly renovated 433-bed student housing asset located at Michigan State University campus in East Lansing, MI. The property was built in 2001 and underwent an $800,000 renovation in 2013. 97.2% occupied for the 2014-15 school year, the property is over 95% pre-leased for 2015-16 with net effective rent growth of 2.6% Units have open floor plans with ensuite bathrooms for each bedroom and full size washer/dryers. The premium amenity package features a newly remodeled clubhouse, free tanning hex, billiards room, swimming pool with year round jacuzzi hot tub, basketball court, sand volleyball court, 24-hour fitness center and computer lab. Leases are all by-the-bed with parental guarantees and there is more than one parking space per bed.
Block 36 is about 3 miles directly north of the Michigan State University campus in high growth Bath Charter Township. The property is on the CATA bus line and free passes are provided to tenants. While not walking distance to campus, the area is increasingly home to students and businesses within walking distance to Subway, Jimmy’s Pub, Tim Hortons and Anytime Fitness. Virtually all purpose-built student housing at MSU is between two and four miles from campus. Michigan State University is a public research university and, with a total enrollment of 50,085, the seventh largest university in the United States. The school is steadily growing, up 1.6% from 2013, and becoming more diverse, there are now 7,883 international students at MSU. Michigan State is a Tier 1, Big 10 University and one of the top public universities in the country.
This offering provides the opportunity to acquire a fully stabilized student housing project at one of the largest universities in the country. Block 36 is trending to another year at or near 100% occupancy. While the property was recently extensively renovated and features a highly competitive amenity package, the units themselves have a more modest finish package and could be upgraded to increase rents and add value. The rent levels are among the lowest in the market and comparable luxury properties with granite countertops and stainless steel appliances are achieving rent premiums of as much as 30%. Block 36 is offered free and clear of existing financing.
Michigan State University began as an agricultural college and was the prototype for 69 land-grant institutions established under the Morrill Act of 1862. Since then it has evolved into one of the premier public research universities in the world. The main campus spans more than 5,200 acres and includes 538 major structures. There are 50,085 students currently enrolled at MSU, and the university boasts a living alumni network of 542,000 graduates worldwide.
MSU has more than 200 programs of undergraduate, graduate, and professional study, through 17 different degree granting colleges. The U.S. News & World Report has ranked MSU’s graduate programs in elementary and secondary education as the 1st in the nation for 20 consecutive years. It also has the #1 graduate programs in nuclear physics and industrial and organizational psychology. Michigan State is the only university in the country with on-campus medical schools graduating allopathic (MD) and osteopathic (DO) physicians, and veterinarians (DVMs).
One of the largest and most significant developments in MSU’s long and storied history just broke ground this March. The Facility for Rare Isotope Beams (FRIB) will be jointly funded by the U.S. Department of Energy Office of Science (DOE-SC), MSU, and the State of Michigan. FRIB is scheduled for completion in 2022 at a projected cost of $730 million. When completed, FRIB will help advance understanding of rare nuclear isotopes and the evolution of the universe. The importance of the presence of such a facility at MSU cannot be overstated, as it will place the university at the forefront of nuclear physics for decades to come.
Michigan State has one of the largest on-campus housing networks in the country. All incoming freshman are required to stay on-campus in one of the 27 undergraduate residence halls and apartments communities. The residence halls are split into five distinct “neighborhoods” and the majority have undergone extensive renovations since 2010. MSU has enough beds to accommodate 15,000 students each year, which leaves more than 35,000 students in need of alternative living situations. The university does not currently have any new on-campus student housing planned.
