Overview
Jones Lang LaSalle Americas, Inc. (“JLL”) is pleased to present The Reserve at Orono (the “Reserve” or the “Property”), one of the only purpose-built student
housing communities that serve the University of Maine (“UMaine” or the “University”). Built in 2012 and offering a mix of three-bedroom and four-bedroom townhome layouts each with 100% bed-bath parity, the Property is situated within walking distance to University of Maine’s campus in Orono, Maine.
University of Maine is the flagship institution within the UMaine System and has enrolled ~11,500 students for the last ten years. The University was recently the recipient of the largest gift in the state’s history when Maine’s wealthiest family pledged $240 million, and this commitment combined with matching grants of $170 million will provide $410 million for comprehensive improvements throughout campus and student life in the near term.
There are only four student housing properties that provide just 1,884 beds to the student body, and there are no projects in the development pipeline. This constrained supply has benefitted operators in Orono where the four properties have been fully occupied and achieved 6.5% average annual rent growth since 2017. A new investor can build upon The Reserve at Orono’s strong operating history and leverage the market’s supply & demand fundamentals to achieve many more years of outsized rent growth and stable cashflows during their ownership.
Investment Highlights
- FULLY OCCUPIED MARKET - Both the on-campus and off-campus student housing market are fully occupied for the 2023-24 AY, and the four off-campus properties achieved 12% year-over-year (“YoY”) rent growth on average.
- RENTAL RATE UPSIDE- Despite offering a superior location and amenities not provided elsewhere in the market, The Reserve remains a discount to its peer set with the lowest average rates in the market. The Reserve achieved 8% rent growth YoY while the other three off-campus communities achieved between 13-16%.
- EMPTY DEVELOPMENT PIPELINE - An empty off-campus development pipeline, coupled with the double-digit YoY rent growth and fully occupied market, indicates favorable supply and demand fundamentals for student housing operators in the near and long term.
- FLAGSHIP STATE UNIVERSITY - The University of Maine at Orono is the flagship school within the University of Maine System, which is comprised of eight institutions and manages an endowment fund totaling $362,082,000 (+8.1% YoY) as of its June 2023 annual report.
- HISTORIC FUNDING - Funded by a $240 million commitment from Maine’s wealthiest family and an additional $170 million in matching funds, the University of Maine has allocated $410 million to renovate and construct new academic and athletic facilities, bringing transformative change to all aspects of campus and student life.
- NEW STRATEGIC PLAN - In 2023, UMaine announced a new Strategic Enrollment Management & Retention Action Plan (“SEM”). Among several objectives, the SEM outlines a framework to grow first-time enrollment by 2.5% annually through 2027 by extending recruitment efforts, modifying financial aid programs, and expanding human resource services. CLICK HERE FOR FURTHER DETAILS.
Photo Gallery
