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Recession leery? Find confidence in student housing property investments



We’ve been hearing a lot of concerns about the “next recession.” Perfectly understandable. The last recession shook up so many of us. It had such a direct and dramatic impact on so many.

Operating under the old adage of “once bitten, twice shy,” we are noticing hesitation with many investors starting to creep back in. Especially if those investors are considering California real estate or the stock market. Folks are flat out frightened about the prospects of investing at the peak of a cycle.

There is legitimate concern that some of the more tried-and-true investment vehicles are at a high. And there is certainly no shortage of economic Chicken Littles. Almost everywhere you look, there is a recession-scared Paul Revere shouting, “Red Ink is coming!”

What’s surprising though, is we’re also hearing optimism on the other side of the spectrum. Advisors pointing to low global interest rates forcing the reserve to slow interest rate hikes. Attractive P/E ratios, a business-friendly administration with deregulation policies, and a massive new tax bill are just now making their impact on economic growth.

You can imagine how confusing that can be for regular investors. This is one of the main reasons why we fell in love with student housing. The data on U.S. college enrollment over the last 40 years shows almost no correlation to macro-economic factors. War, peace, election years, recessions, high inflation, high interest rates — you name it — is everything we’ve experienced in that timeframe, and yet all we’ve seen is slow, steady, consistent growth in college enrollment.

We believe that growth will remain that way for most of the major colleges and universities. Some of the smaller, regional, specialty or junior/community colleges may be threatened, but the large, institutional, research and public universities continue to expand their applicants, support, endowments, etc. That’s our main investment focus right now — student housing.

Our feeling is that for non-commuter schools, students will enroll regardless of the economic cycle. For non-commuter schools, these students will need a place to live. Preferably close to campus. Since many of these campuses have been around for centuries, there is often, a limited, finite amount of space near campuses.

With that in mind, if we find what we believe to be the right student housing property, potentially well-positioned in a tight market, we believe we can keep the property well-occupied, with consistent profitable cash flow, tax shelter benefits and long-term appreciation potential — all in a brick and mortar, tangible investment. A property where the potential for cash flow derives from demand that is anchored by the historical stability of the university.

Offering Disclosure:
The contents of this communication: (i) do not constitute an offer of securities or a solicitation of an offer to buy securities, (ii) offers can be made only by the confidential Private Placement Memorandum (the “PPM”) which is available upon request, (iii) do not and cannot replace the PPM and is qualified in its entirety by the PPM, and (iv) may not be relied upon in making an investment decision related to any investment offering by an issuer, or any affiliate, or partner thereof (“Issuer”). All potential investors must read the PPM and no person may invest without acknowledging receipt and complete review of the PPM. With respect to any “targeted” goals and performance levels outlined herein, these do not constitute a promise of performance, nor is there any assurance that the investment objectives of any program will be attained. All investments carry the risk of loss of some or all of the principal invested. These “targeted” factors are based upon reasonable assumptions more fully outlined in the Offering Documents/ PPM for the respective offering. Consult the PPM for investment conditions, risk factors, minimum requirements, fees and expenses and other pertinent information with respect to any investment. These investment opportunities have not been registered under the Securities Act of 1933 and are being offered pursuant to an exemption therefrom and from applicable state securities laws. All offerings are intended only for accredited investors unless otherwise specified. Past performance are no guarantee of future results. All information is subject to change. You should always consult a tax professional prior to investing. Investment offerings and investment decisions may only be made on the basis of a confidential private placement memorandum issued by Issuer, or one of its partner/issuers. Issuer does not warrant the accuracy or completeness of the information contained herein. Thank you for your cooperation.

Securities offered through Wealthforge, LLC Member: FINRA/SIPC. Only available in states whereWealthforge, LLC is registered. Wealthforge is not affiliated with any other entities identified in this communication.

Real Estate Risk Disclosure:
  • There is no guarantee that any strategy will be successful or achieve investment objectives including, among other things, profits, distributions, tax benefits, exit strategy, etc.;
  • Potential for property value loss – All real estate investments have the potential to lose value during the life of the investments;
  • Change of tax status – The income stream and depreciation schedule for any investment property may affect the property owner’s income bracket and/or tax status. An unfavorable tax ruling may cancel deferral of capital gains and result in immediate tax liabilities;
  • Potential for foreclosure – All financed real estate investments have potential for foreclosure;
  • Illiquidity – These assets are commonly offered through private placement offerings and are illiquid securities. Private Placements are Speculative.
  • There is no secondary market for these investments;
  • Private placements carry a high degree of risk
  • Reduction or Elimination of Monthly Cash Flow Distributions – Like any investment in real estate, if a property unexpectedly loses tenants or sustains substantial damage, there is potential for suspension of cash flow distributions;
  • Impact of fees/expenses – Costs associated with the transaction may impact investors’ returns and may outweigh the tax benefits;
  • Stated tax benefits – Any stated tax benefits are not guaranteed and are subject to changes in the tax code. Speak to your tax professional prior to investing.

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