Vesper Holdings is a joint venture that recently purchased a student housing community in Tampa, Florida. According to this article, the University of South Florida's main campus in Tampa currently has a total of 50,626 students enrolled, with 36,469 full- and 14,157 part-time students. The cost of living in off-campus accommodation went up 1.4 % in the 2021-2022 academic year compared to the previous term, as reported by the National Center for Education Statistics. Preleasing for the coming school year stood at 70% at the end of March, according to a Yardi Matrix report. And the total number of bedrooms under construction accounted for 3.8% of enrollment during the same time frame. The same report showed that rents were up 12% year-over-year in March.

Vesper Holdings is a great option for investors looking to finance a student housing community in Tampa. They offer a variety of loan products, including fixed-rate and adjustable-rate mortgages, bridge loans, and mezzanine financing. They also offer a variety of loan terms, including short-term, mid-term, and long-term financing. Additionally, they offer a variety of loan structures, including interest-only, amortizing, and balloon payments.

The University of South Florida’s main campus in Tampa currently has a total of 50,626 students enrolled, with 36,469 full- and 14,157 part-time students, according to Data USA. The total number of bedrooms under construction accounted for 3.8% of enrollment during the same time frame, according to a Yardi Matrix report. Therefore, the size of the Tampa student housing community is approximately 1,919 bedrooms.

Investing in student housing can be a great way to generate consistent income. Student housing properties typically have higher occupancy rates than other types of rental properties, and they often come with built-in amenities that can attract tenants. Additionally, student housing properties can be a great way to diversify your portfolio, as they are often less affected by economic downturns than other types of rental properties.

For example, student housing properties are often located near universities and colleges, which means that they are less likely to be affected by job losses or other economic downturns. Additionally, student housing properties often come with amenities such as fitness centers, study rooms, and other features that can attract tenants.

Finally, student housing properties can be a great way to generate consistent income. Student housing properties typically have higher occupancy rates than other types of rental properties, and they often come with built-in amenities that can attract tenants. Additionally, student housing properties can be a great way to diversify your portfolio, as they are often less affected by economic downturns than other types of rental properties.

The student housing finance market has evolved greatly in the past 20 years. With millions of people attending colleges and universities in the U.S. each year, the student housing market is absolutely one worth investing in. Still, in a niche market such as the student housing market, choosing the right loan program is crucial.

For borrowers and investors seeking to adequately house the next generation of American leaders, the Freddie Mac Student Housing Loan is one of the best ways to accomplish that goal.

Freddie Mac is no stranger to the niche student housing market space, having originated over $9 billion and securitized nearly $5 billion in student housing loans since 2010 alone! Their extensive experience and robust understanding of the unique qualities of student housing has led them to have one of the most flexible and competitive student housing loan programs available.

Freddie Mac offers their student loan program with up to 80% LTV and a DSCR minimum at 1.30 depending on the loan structure. Generally, FRMC student housing loans come with terms between 5-10 years but terms of up to 30 years are available for any fixed-rate loan not purchased for securitization. All dedicated student housing property types are permitted, including high-rise, mid-rise, garden, and cottage style properties.

Financing options available for student housing investments include acquisition or refinance, with a maximum amortization of 30 years. Ground leases may be permitted for land owned by a college or university with prior approval. Lease parameters include individual tenant lease by the apartment, bedroom, or by the bed, and rent under a master lease is allowable with prior approval. Lease terms are between 9 and 12-months, with 12-month being preferred. Parental guaranty is preferred, and non-recourse with standard “bad boy” carve-outs is required. Supplemental loans are available subject to requirements in the Loan Agreement and current Freddie Mac program and product requirements at the time of the supplemental loan request. Exclusions include residence halls, multiple occupancy rooms with a shared common bathroom, centralized food service areas, and dining halls. Tax and insurance escrow is generally required, as well as a minimum of $150 per bedroom or $300 per unit for a replacement reserve deposit. An application fee of the greater of $2,000 or 0.1% of loan amount is also required. Early rate-lock and Index Lock options are available in most cases, and no Refinance Test is necessary if the loan has an amortizing debt coverage ratio (DSCR) of 1.40x or higher and an LTV of 60% or less.

Investing in student housing comes with a few risks. First, due to the seasonality of school schedules, there could be seasonal vacancy issues. Additionally, student tenants may not have the same level of financial stability as other tenants, so there is a risk of defaulting on rent payments. Finally, student housing investments may require more frequent renovations and repairs due to the wear and tear of a higher tenant turnover rate.

For more information, see 5 Considerations for Choosing an Investment Property and How to Renovate Your Apartment Complex.

Joint ventures for student housing investments can provide a number of advantages. For example, the operating member of the joint venture can provide the commercial real estate expertise needed to manage the project, while the capital member can provide the necessary funds. Additionally, the capital member may be able to take advantage of lower-cost loan options, such as the HUD 223(f), to finance the acquisition. This can help to reduce the overall cost of the investment. Finally, student housing investments tend to have lower vacancies than luxury assets, which can help to increase the potential for profit.