USC Shrine Collection

University of Southern California Off-campus student housing

PROJECT OVERVIEW

Location: Prime A+ for USC Student Housing

Acres: 2.0 acres

103 Units/324 Beds

Studio, One, Two, Three and Four Bedroom Apartments

Doubling up allowed.

Acquisition Cost: $39.1 M

Financing: $34.3 million bridge loan

Description

USC Shrine Collection student housing apartments is a large off-campus garden style community originally comprised of a total of 103 units/324 beds in 6 separate buildings (expanded into 350 beds after 2016 summer renovation).  The community is immediately adjacent to a few University of Southern California ("USC") owned buildings (including, the Shrine Auditorium, USC Shrine Parking Structure and  USC School of Cinematic Arts) just outside the gates of the USC main campus and one block away from the major retail corridor of Figueroa Street.  The project is also located 3 blocks from Fraternity Row and 5 blocks from USC's newly opened second campus, University Village (which contains in addition to classrooms and dormitories, a Trader Joe's and Target).

The project was purchased by RedBridge Capital in a joint venture with a Chinese private capital group.

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Investment Strategy

We acquired the Shrine Collection with an existing 100% occupancy and an in-place net operating income of approximately $1.94 million. Our strategy was to eliminate existing property management inefficiencies and renovate all of the units to generate a higher rental rate and increase the bed count.

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Unique Challenges

The Shrine Collection was purchased as a “value-add” opportunity, and required a creative and intense renovation program.  As the property was 100% occupied on 11.5 month leases, RBC had to restructure all the leases with the existing 324 tenants to ensure the property was vacant by mid-May 2016.  The $5.54 million renovation project which under a normal construction schedule would have taken 4.5 to 5 months to complete had to be executed within 75 days in order to deliver the units on time for the following 2016-2017 academic year occupancy.

RBC successfully completed the renovation on time and the property was 100% leased and occupied for the start of the 2016-2017 academic year.  As a result of the renovation, the net operating income was increased from $1.9 million to $2.8 million in less than 1.5 years.  The completed renovation included a redesign of some of the units that also resulted in an increase of 36 beds to the project  from 324 beds to 350 beds.