Each year, Midwest Real Estate News runs its Commercial Real Estate Hall of Fame issue, highlighting the careers of the most successful CRE pros in the Midwest. This year, we are running those profiles online. Today, we look at the bustling career of Kevin Larimer, managing director of student housing with the Detroit office of Berkadia.
Big man on campus: Berkadia Managing Director for Student Housing Kevin Larimer wrote an intriguing article about his specialty about a year ago. He made the point that a lot of buyers see student housing as a defensive investment, but he insists it’s more than that. As builders are running out of land close to campuses, student housing is becoming dearer.
“So is ‘defensive’ truly an appropriate classification for student housing product investments?” he asked in the Commercial Property Executive blog. “For a product type that is supply constrained, enjoys annual occupancy in the 97 percent range, realizes annual rent growth of 3.5 percent, has a fixed resident base to draw from each year that continues to grow and can typically be acquired at a higher yield than its multifamily counterpart, the ‘best risk-adjusted return in real estate’ seems more appropriate.”
A big deal: Larimer and Berkadia had a big score in June of 2017. He led his firm in arranging the sale of two properties – one at the University of Washington in Seattle and the other at Cal State/Fullerton – for a total of more than $146 million.
“Student housing seems to be the product type of choice right now for investors,” Larimer said at the time. “Investors have identified the strong fundamentals of student housing with fewer deliveries, average occupancy above 97 percent, annual rent growth more than three percent and a fixed resident base from which to draw. Whether they are looking for yield or a defensive position, investors are finding a comfortable home for their capital in student housing.”
The right approach: After 27 years, Larimer is known as one of the wiser heads in the country when it comes to student housing, and CRE in general.
“I always took a long term approach, where no single transaction was more important than the relationships and reputation I was building,” he told us. “It takes a lot of transactions to build a reputation, but it only takes one to ruin it.”