Unusual Student Housing Portfolio Hits the Market
The general rule that “everything’s for sale, if the price is right” definitely applies to real estate. Investors can buy anything from a dialysis clinic to a fast food restaurant to a transmission shop to even a sorority house.
A sorority house? Yep, you can buy a sorority house and get an absolute net lease, meaning all you do is collect a rent check. The tenant covers all expenses for operating the property.
Broadstone Real Estate, based in Rochester, New York, has a portfolio of seven sorority houses rented to Alpha Omicron Pi, a 122-year-old international women’s fraternity that started at Barnard College in New York City.
“It’s not something you see every day,” said Barry Wolfe, a net least expert with Marcus & Millichap in Fort Lauderdale, Florida.
According to listing information with CoStar, the sorority houses generate a little more than $2 million in net operating income. Sorority houses are considered a form of student housing, a category, according to mortgage finance giant Fannie Mae, typically produce a return, or cap rate, under 6%.
Brokers with CBRE’s Atlanta office have the listing. A sale price wasn’t disclosed. CBRE’s Will Pike declined to comment while the sales process was underway.
Broadstone bought the portfolio from Atlanta-based TPA Group in 2016, according to CoStar data. Not all of the sales prices were disclosed. But Broadstone paid nearly $6.6 million for the sorority house 1411 Elm Ave. at the University of Oklahoma in Norman. The San Jose State University house at 408 S. 8th St. sold for $4.5 million. All were renovated between 2014 and 2015.
The oldest house in the mix at 17 Maple St. was built in 1893 and is associated with Hartwick College in Oneonta, New York. University of Kentucky has the newest house – built in 1985 at 368 Rose Lane in Lexington, Kentucky.
The other houses are located at Florida State University in Tallahassee, Florida; East Carolina University in Greenville, North Carolina; and Oregon State University in Corvallis, Oregon.
Click here to see some of the nations most prestigious sorority houses. https://www.youtube.com/watch?v=BNjBZNt-Ps8