A joint venture between Houston-based Asset Plus Companies and
institutional investors advised by J.P. Morgan Asset Management has
acquired the 250-unit Harbor View Apartments located in Kingwood, a
master-planned community approximately 20 miles northeast of the
Houston CBD.

The recently completed Class A property was purchased out of
foreclosure from Capital One, N.A.

The four-story apartment community features air-conditioned
corridors, elevators and a direct access parking garage. A variety
of floor plans are available, including 1-, 2- and 3-bedroom units.
Asset Plus Companies will begin preparing the property to resume
leasing activity and will officially open a leasing office mid-June.

Kingwood, established in 1970, has over 70,000 residents and is
filled with amenities and conveniences, including 75 miles of
greenbelt trails, 500 acres of parks and nature reserves, two
community sports parks, a large variety of restaurants and shopping
and much more. Major road improvements along U.S. Highway 59 have
made Kingwood one of the most accessible communities in the greater
Houston area.

About Asset Plus Companies

Founded in 1986, Asset Plus Companies is a third-party property
management firm specializing in real estate services for investors,
developers, and owners. The company manages a portfolio of more
than 180 multi-family properties and recently ranked #38 on the NMHC
list of the nation’s 50 largest apartment management companies.

About J.P. Morgan Asset Management – Global Real Assets
J.P. Morgan Asset Management – Global Real Assets has approximately
$43.2 billion in real estate and infrastructure assets, as of March
31, 2009. With a 40-year history of successful investing and a staf
f of 361 professionals, J.P. Morgan Asset Management – Global Real A
ssets identifies, analyzes, negotiates, acquires, develops, redevelo
ps, renovates, operates, maintains, finances and sells assets, on be
half of its clients. J.P. Morgan Asset Management's broad investment
capabilities and framework for analyzing opportunities in today's c
omplex real estate and infrastructure markets provide critical insig
hts for its institutional clients in both the public and private mar
kets. 

Asset Plus Companies’ employees work with housing and young people day in and out. But this month, they are using their talents in a different way, to benefit abused, troubled and homeless children in the Fort Bend County area. Asset Plus and the Fred and Mabel Parks Youth Ranch (FMPYR) have started construction of the Youth Ranch Teenage Homeless Shelter, which is scheduled to open in September 2010. “There is currently no homeless shelter in all of Fort Bend County,” according to Asset Plus CEO and member of the FMPYR Board of Directors, Michael S. McGrath. FMBYR, which is a not-for-profit 501(C) (3) organization composed of representatives from various Fort Bend churches, recognized and is responding to this need for crisis intervention and short-term shelter for children aged 12 to 17 who have faced abuse, neglect and are in need of a temporary home until they can be reunited with their families, placed in foster care or placed for adoption if necessary.
 
The Youth Ranch will continue to seek a variety of grant types and private funding to build the shelter while work continues to develop and construct the crisis portion to serve all families and youth in the Fort Bend County area. Asset Plus is donating the construction management of the facility, which will cost about 1.3 million. The Fred and Mable Parks Foundation and the George Foundation have made generous donations to the project.
 
Arrow Ministries has been selected by the board to operate the facility when complete. “We will have offices for Arrow, CPS and other services on site to help reunite these kids with their families or find alternatives for them. This will hopefully get kids off the street or keep them out of jail,” said McGrath.
 
Construction officially began on Friday, March 5th with a group of Asset Plus employees demolishing an existing structure on the site and preparing it for new concrete and standing walls. “I’m very pleased that Asset Plus is involved in this effort, which is such a positive addition to our community, “added McGrath.

Asset Plus Companies ranked in the National Multi Housing Council’s Annual “Top 50” Managers released this week. Not only did the company make the list for the first time, but it ranked 38th among the nation’s largest property managers.

“Strategic partnerships with banks, special servicers and existing clients have been the key avenues of growth for us,” according to Asset Plus Companies’ Senior Vice President Ryan McGrath. The company added nearly 100 new properties to its portfolio over the past 18 months, bringing its total to just over 32,000 units nationwide.

Asset Plus Companies’ growth plan encompassed adding some of the most talented and experienced people in the industry to the company’s team, at a time when many other companies were downsizing. “Within a service-based business there is only one differentiating factor and that is the quality of service provided,” says McGrath who continued, “the quality of service is dictated by the talent level of the individuals providing it.”

“We plan to continue our growth, but we will only do so at a pace where we continue to support every client at the very highest level,” according to McGrath, who added the company is targeting to be number 25 on the NMHC list for next year.

Based in Washington, DC, NMHC is a national association representing the interests of the larger and most prominent apartment firms in the U.S.  NMHC’s members are the principal officers of firms engaged in all aspects of the apartment industry, including owners, developers, managers and financiers.  One-third of Americans rent their housing, and more than 14 percent live in a rental apartment. For more information, contact NMHC at info@nmhc.org, or visit NMHC’s web site at www.nmhc.org.

It makes sense Asset Plus SVP Ryan McGrath looks like he could be in college. His company is one of the nation's top five privately-owned providers of student housing. In the past few years, he tells us, there’s been an expansion of the field as investors moved to a sector they saw as recession-proof. (He says it’s not, but it is resilient.) Unfortunately, enrollment may have increased as predicted, but not in the colleges investors thought, and there hasn’t been a big increase in demand for privately run student housing. Asset Plus has 41 student housing properties in 19 states totaling 25k beds. It builds off-campus facilities when universities balk at amenities like huge pools.

Voila, a huge pool. In this case, at the Lofts at Wolf Pen Creek, a student housing development at Texas A&M. It was completed last year, and even though people were nervous about the timing, it’s 90% occupied at above market rates. It’s also already 53% preleased for next year. (The market average is 25%.) Asset Plus created a separate student housing arm, Asset Campus Housing, in ’98, which Ryan says has really taken off. Asset Plus is growing, too. Two years ago it had 432 employees; now it has over 1500. Ryan tells us he went hunting with some real estate buddies last weekend and Bisnow was a point of discussion. Glad we could come along!

Asset Plus Companies took a different stance on student housing when it developed The Lofts at Wolf Pen Creek in College Station, Texas. The project, which incorporates 253 stacked flats and 11 townhomes, also contains retail space and a clubhouse, making it mixed-use in nature.

“We have watched College Station and Texas A&M grow over the years and we wanted to do something different in the market,” says Barrett Kirk, senior vice president, acquisitions and development, of Houston-based Asset Plus. “We felt that the market was ready for something that has been done in other markets around the country, not necessarily on the student housing side, but on the multifamily side. The mixed-use concept has done very well in cities and attracts a younger crowd.”

Asset Plus is especially please with the location in the Wolf Pen Creek corridor, a special use district within the city of College Station. The district has certain architecture barriers and use restrictions. It also has benefits; it is located next to an amphitheatre and the Wolf Pen Creek trail system, both popular attractions. It is also within 1.5 miles of the Texas A&M campus. The site itself lingered for years while various development plans floated through city government. Asset Plus worked with the city to create an ideal plan, while maximizing the project’s density on the land.

“We let the site dictate what we could do with it,” says Kirk. “This corner was an amazing corner to have this mixed-use project.”

Asset Plus brought Houston-based Meeks + Partners to design The Lofts at Wolf Pen creek. “The location gave us a fantastic architectural opportunity, especially when you add the mixed-use elements,” says Keith Malone, associate partner with Meeks + Partners. “We can use the mixed-use element to connect the student community with the larger community of College Station.”

Meeks + Partners first began by locating the retail within the project, then locating the student amenities, then the tenant spaces. A 13,840-square-foot clubhouse – a very attractive amenity to tenants – was a must-have for Asset Plus. The clubhouse includes a two-story gym, tanning beds, a game room, a movie theatre, a sauna and a business center round out more amenities in the clubhouse. The project also is one of the few in the market that has secured, private parking. Security played a major role in the design of the project because of the sense of safety it gives residents and their parents.

“With students you want the wow factor,” says Kirk.”We believe that all these amenities give the wow factor on the leasing side, but also help renewals. We have two private student rooms in our business center. Every time I walk in, the place is packed.”

The lofts are also laden with attractive features. Each has 10-foot ceilings, exposed ductwork and hardwood floors. Six of the units are extra large, and as an additional amenity – and to create buzz around campus – they each come with a billiards table. All six units leased on the first day of availability.

“We try to take into account that a lot of these students are leaving home for the first time,” says Mark Lindley, senior vice president, construction division, of Asset Plus. “We want to invite them to stay with us, but feel comfortable in doing so. We want the parents to understand that too.”

Meeks + Partners placed as many loft units on the site that it could handle from a parking and living environment perspective. Asset Plus did not make the project as dense as possible, because it felt that it could compromised student life at the project.

“We kept in mind that we wanted to create some interior courtyards for private student amenity space,” says Malone. “The design itself is really an urban solution. It fit in perfectly with the city of College Station’s vision for this site.”

“We create a lot of pedestrian activity to this corner,” says Lindley. “We worked with a landscape architect to create a large plaza with fountains, outdoor tables and seating in front of the retail space. We also piped in music. This draws not only our residents, but the thousands of students that live within a half-mile radius of the project.”

Asset Plus manages three other projects in College Station, and has developed the Cambridge at College Station, a dormitory-style project, in the market.

“With student housing, you have to have a good location, the right product type and a good management company,” says Kirk. “Trying to find a good site in today’s world can be difficult. If you want to do a traditional garden style deal spread over 13 to 20 acres, you have to go further away from campus. Today’s market is doing just the opposite. You want to be as close to campus as possible.”

Source: January/February 2010 Student Housing Business

* Randall Shearin

Making sure beds remain occupied becomes increasingly hard when one looks at Texas’ student housing market. The past decade saw a drastic increase in new student housing projects, many of which were built 3 to 5 miles off campus, where developers could find enough land to build the larger communities they had planned. At the time, students flocked to the communities because they were new and they had amenities lacking in closer projects. That has changed today.

“What’s happened is that virtually every market is overbuilt,” says Jim Short, president and CEO of Campus Living Villages, a Houston-based student housing developer and owner. “There are more beds on and off campus than there are students. Guess who’s hurt? The ones that are 3 to 5 miles away and built 10 years ago, which had good amenities at the time, but have been far eclipsed by the latest and greatest.”

Short add that this has nothing to do with the recession, either. Too many people simply entered the market. Weakness is being seen in several markets such as College Station, and it stems mostly from the excess development.

“They talk about student housing being recession resistant. I think it’s just like any other section in the real estate market. If you overbuild it – if you put more beds or more units than what can be leased up in any given year – you’re going to have softness in the market,” says Barrett Kirk, senior vice president of acquisitions and development for Houston-based Asset Plus Corporation. Kirk mentions College Station, which added approximately 3,000 beds this year, as an example of this.

“Overnight, it went from being a great market to a weak market,” he adds.

Despite the soft market in College Station, Kirk and his company have seen measured success there with one of their new off-campus projects. The Lofts at Wolf Pen Creek. Situated just a few blocks from the campus of Texas A&M University and right across the street from Wolf Pen Creek Park and Amphitheater, The Lofts at Wolf Pen Creek blends off-campus living with New Urbanism.

The community features loft-style units that contain such luxury finishes as higher ceilings, hardwood-style floors, track lighting and hi-definition TVs in every unit. The ground floor of the four-story building contains 9,000 square feet of retail space, which is occupied entirely by restaurant tenants. Honeybaked Ham will be open by press time, with Tutti Pasta and Red Mango opening in February. The final tenant space is currently vacant. Asset Plus was selective in the tenants it allowed to lease the space, since the restaurants are expected to add to the overall experience of the community.

“The way we always thought of the retail component was as an amenity,” says Kirk. Retail space is not all The Lofts at Wolf Pen Creek has to offer. The community features two swimming pools, a 2,200-square-foot fitness center, a large clubhouse and other amenities that serve as what Kirk calls the “wow factor” when attempting to attract new residents. The amenities are also the reason many of those same people decide to renew their leases.

“When we go out and build a student housing project, the concept is that we are reaching out to kids who are leaving home for the first time. How do you make the kids comfortable, and feel safe and secure leaving mom and dad at the nest?” says Mark Lindley, senior vice president of Asset Plus’ construction division.

One change is that students today almost expect private bedrooms and bathrooms. “Putting them into a four-bedroom dormitory with cinder block walls and one bathroom at the end of the hallway is just not good enough for kids these days,” Lindley says. This has a lot to do with how many of these students grew up. The days of siblings sharing bedrooms and bathrooms are largely in the past for many families, and these children expect the same when they go off to college.

Another feature students expect today is a commitment to sustainability. The green movement is sweeping colleges nationwide, and students are expecting the same in their residences. Developers, in turn, are giving the market what it asks for. “You have the ability to design to what the market is expecting, and the market – particularly the younger crowd – are looking at it from a sustainability standpoint,” says Dave Wallace, CEO of Wallace Bajjali Development Partners. “They are wondering where out planet is going to be. Where is our environment going to be? Where is our oil production – our energy production – going to be 10 or 20 years from now? It’s the first generation that is really focused on those kinds of issues.”

This means more than that just making sure a project is LEED-certified. Students are interested in recycling programs, mass transit options near the community, activity programs to keep residents healthy and especially energy efficiency. For Wallace Bajjali’s most recent project, a community serving Baylor University known as Heritage Quarters, the design successfully merged students’ interest in efficiency with the developer’s goal of maximizing space. Wallace Bajjali only had a single city block in downtown Waco on which to construct the project. It responded to this challenge by utilizing a branded design from architectural firm Humphreys & Partners known as the e-Urban Student that answers the question of how to fit the most units possible on a small space. The four-story building contains 374 beds, which was done so by eliminating unnecessary and no revenue-producing spaces – a design idea that also saves an estimated 20 percent on utility bills for residents.

Sometimes, amenities are not necessary. Sometimes, the project itself is so different from everything else in the market that students are naturally drawn to it. This is the case with The Cottages at Lubbock, a 241-unit community serving the Texas Tech University community that opened this past semester. As opposed to the garden-style units many students are used to, The Cottages consists of 95 Craftsman-style houses each containing between two and five bedrooms. The community also features a plethora of amenities, most notable an 8.230-square-foot clubhouse with a screening room, a fitness center, a tanning salon, a business center, a billiards room, a computer lab, a swimming pool and a volleyball court.

“The Cottages of Lubbock offers students the best of both worlds; a neighborhood-style feel with resort amenities just minutes from the hustle and bustle of campus,” says Short, whose company recently acquired the community.

With off-campus student housing projects raising the bar to almost resort-level heights, schools are dealing with on-campus housing in a variety of ways. Universities still have the ultimate amenity – an on-campus location – and many see that as enough of an enticement to attract students. They also have the option to mandate students live on campus if occupancy starts to drop. Other schools, especially those trying to increase enrollment, are attempting to compete with off-campus housing.

“Universities that have the financial means to build new housing are doing so as a recruiting tool and are providing new developments with similar amenities – perhaps, not as grand – but the on-campus location can make up the differences.” Short says. Some schools simply choose not to try to complete with off-campus housing. Developers, for obvious reasons, believe this to be a good idea. They believe the private sector is better capable of building student housing cheaper, quicker and better than a school could.

“The universities should be focusing on investing their capital on things that generate credit hours, whether that is laboratories, classrooms or other things of that nature,” Wallace says. “A dormitory does not generate credit hours.”

Wallace see public/private partnerships as one way to please both sides when it comes to student housing. Typically, the developer will shoulder the cost of the project, while the university provides the students to fill it. If the agreement has a trigger in which the housing reverts back to the school’s control for a period of time, there is no downside for the school.

With the recession causing enrollment numbers at colleges and universities nationwide to increase, demand for student housing will see a similar job. Universities, which may be struggling due to depleted endowments, will be financially limited from spending money on new housing, setting up what Wallace sees as a perfect storm for these partnerships.

“You’re already seeing privatization of food and beverage operations [on campuses]…Student housing should be no different,” Wallace says.

While many developers are looking to the future for new designs and ways to do student housing, the traditional garden-style apartment complex has not been abandoned. There are situations in which the design fits, and many Texas schools, including growing UT campuses in Tyler, San Antonio, El Paso and Arlington, still have the available land to support these projects. For more established schools, the land has simply run out, and these projects are a way for student housing developers to get past the limited factor of available land.

“There are still a lot of people interested in doing garden-style communities, but there is not the land to do it,” Short says. “No one wants to go 3 miles from campus today to build anything, so you simply can’t pencil out a deal with enough beds per acre. You have to start doing something innovative.”

Source: Texas Real Estate Business – January 2010

Asset Plus Companies was honored with a Mayoral Proclamation from Houston's new mayor, Annise D. Parker, last week. The award was presented to recognize companies that play a vital role in the Houston area's economic development, provide jobs and shape the landscape of the Houston community.

The award was presented at the annual Construction Expo held at the Reliant Convention Center. Several companies were recognized along with Asset Plus for contributing to the area¹s growth and construction, covering many facets of the construction industry in the Houston region in 2009.

Senior Vice President of Construction, Mark Lindley and Assistant Vice President of Construction, Alan Hyland received the award on behalf of Asset Plus from Houston City Council member Anne Clutterbuck.

November 18, 2009– Ryan McGrath, CCIM, Vice President of Asset Plus Companies, has earned the CERTIFIED PROPERTY MANAGER (CPM) designation from the Institute of Real Estate Management (IREM), an affiliate of the National Association of REALTORS.  The CPM designation is awarded to real estate managers who have met the Institute’s rigorous requirements in the areas of professional education, examination and experience.  CPM Members must also abide by a rigorous Code of Professional Ethics that is strictly enforced by the Institute.  Ryan was most recently recognized in Journal of Property Management’s “30 Under 30” in the September 2009 issue. He has also been elected to the Houston Apartment Association Board of Directors.
 
Ryan works in the Acquisitions/Dispositions and Business Development divisions of Asset Plus. Since being at Asset Plus, Ryan has earned his Real Estate Salesperson License, CCIM designation, CPM designation and has become an active member of ULI.  Prior to his work at Asset Plus Companies, Ryan worked in the investment banking division of Goldman Sachs, where he earned his Series 7 license. Ryan graduated in 3 ∏ years, with honors, from Vanderbilt University, while competing on the Varsity soccer team.  He earned a Bachelor Degree in Economics with minors in Financial Economics and Corporate Strategy.  During the completion of his degree, Ryan studied International Finance and International Trade at the London School of Economics in London, England. He continued his education in Spanish and Cultural Studies while participating in intensive immersion programs in Buenos Aires, Argentina and Montevideo, Uruguay.  
Founded in 1933, the Institute of Real Estate Management educates real estate managers and certifies and enhances the competence and professionalism of individuals and organizations engaged in real estate management.  IREM also serves as an advocate on issues affecting the real estate management industry.  IREM has over 18,000 individual members, 8,600 who hold the CPM designation and 3,600 who hold the ARM certification.  In addition, it has 525 firms that hold the AMO accreditation.  IREM also has 80 U.S. chapters, 7 international chapters and several other partnerships around the world.

College Station, Texas - On Thursday October 15, 2009, Mr. Mark Lindley, Senior Vice President of the Construction Division at Asset Plus Corporation, gave Texas A&M University (Aggie) MSLD candidates an outstanding insight into what it takes to put together a successful student housing development. Lindley provided the students insight into: market analysis and development opportunity identification; site selection and acquisition; development conceptualization; design; entitlement; construction management; development financing; project marketing; leasing and property management at Asset Plus Corporation’s latest mixed-use student housing project in College Station, Texas.
 
Final year MSLD candidate Christopher McGhee of Houston, Texas, summarized the lessons learned from the project briefing and site visit to The Lofts at Wolf Pen Creek:

• Identify and test the development opportunity: a strong return could be generated from student housing near Texas A&M University, despite the current recessed economic conditions, if it was well conceptualized and delivered.
• Select and acquire a suitable site: after a comprehensive review of available sites the Wolf Pen Creek site was selected on price, proximity to the campus and community facilities; and, its ability to yield the mixed-use development concept.
• Know your target demographic: development conceptualization was based on an extensive analysis and detailed understanding of what students wanted, but lacked, in the then current student housing offer. Time had to be invested in talking to students to ensure the right match between the development concept and the needs of the target demographic that it sought to satisfy.
• Focus on development approval and entitlement: the development approval and entitlement process had to be managed in a sensitive and cost effective manner to ensure project delivery on-time and on-cost. The needs and desires of the approval authorities had to be properly understood, appreciated, and respected. Negotiations ensured that each party won from project approval.
• Manage down construction cost: the cost to deliver the project had to be managed down through design and construction so as to maximize development profit. Particular attention was paid to construction method, materials, and finishes to ensure building performance, appearance, and on-time delivery.
• Market your product through design: the inclusion of amenities like the swimming pools, shops, games rooms, gym and fitness center, computer rooms, and movie theatre were a powerful marketing tool to demonstrate to students that their desires and preferences were delivered in The Lofts at Wolf Pen Creek.
• Keep your finance structure cost effective: a simple debt/equity ratio that included a strong equity partner (pension fund) and no mezzanine debt.
• Manage the asset to peak performance: the physical (building) asset can only reach its full income producing potential and value with a management team that both knows and balances user satisfaction with peak financial performance. 

Mark Lindley’s closing piece of advice to the MSLD candidates: “Don’t be greedy. Be patient but focused. Take little but deliberate bites of the apple and you’ll get to the core.” The project was delivered on budget, within a tight 12 month construction timetable, and opened on-time for the fall 2009 semester—97% leased.
 
ABOUT THE TEXAS A&M REAL ESTATE DEVELOPMENT ASSOCIATION
The Real Estate Development Association (REDA) provides students in the Master of Science in Land Development (MSLD) program at Texas A&M University with enhanced leadership training, access to, and understanding of the real estate development industry, and professional exposure and networking. Texas A&M University's MSLD program has produced many of today's Real Estate Development Industry leaders - a proud tradition.

Houston, Texas - Asset Campus Housing has written another client success story in one of the most troubled student housing markets in the country. Canopy, a 770-bed student housing facility in Gainesville, Florida, is now 98% leased at the highest prices in the market, out pricing comps by $100-$150/bed. The property outpaced the market by over 15 points, with other leading properties gaining only one to two percentage points above market. And, Asset Campus Housing had the property pre-leased to 98% just four months after acceptance of the clubhouse.

Arlington Properties developed Canopy and hired Asset Campus Housing to market the property. This state-of-the-art complex features a virtual golf machine, indoor basketball court, cutting-edge fitness equipment and workout facility as well as unit upgrades including stainless steel appliances, wood floors and granite throughout.  New and packed with amenities, Canopy had another strong selling feature in its landscaping and shaded surroundings, a result of many existing trees being preserved during development.

Asset Campus Housing (ACH) was selected to market the property because of their extensive experience with the Gainesville, Florida market. Facing decreasing enrollment at the University of Florida due to state funding issues and increasing competition caused by 5,000 new beds created in the last 36 months, supply outpaced demand and had left many properties struggling to lease.
Creative marketing efforts developed and executed by the onsite ACH team and corporate marketing department led to the unprecedented success of the property. An email and text message campaign to students at the University of Florida and Santa Fe Community College proved to be an extremely effective strategy. Additionally, ACH brought a seasoned manager out of retirement to manage the property. “Her extensive knowledge of the Gainesville market, along with ACH’s experience in new development lease-ups was instrumental for Canopy’s success,” said Julie Bonnin, Chief Operating Officer for ACH.  In addition to a low property to supervisor ratio, ACH fuses new hires with seasoned professionals to help create a culture onsite that will sustain the asset for many years to come. 
“You have to focus on the positive and get the job done for the client. We believe in creating our own success regardless of poor market conditions or other obstacles ,” according to Bonnin.

Asset Campus Housing, Inc. (“ACH”) is a wholly owned subsidiary of Houston based Asset Plus Companies, a third party property management firm specializing in commercial real estate services for investors, developers, and owners. Asset Campus Housing manages a student housing portfolio of 32 properties and 18,000 beds located throughout the United States.