Austin-based Parallel Opens Dorm Near Texas A&M
Austin-based student housing developer Parallel broke ground on its second development in College Station, home of Texas A&M University, the largest university in the Lone Star State.
Parallel’s 750-bed development at 401 First Street will offer bachelor, one- and two-bedroom apartments and is expected to open in fall 2024, according to a press release.
Parallel’s first student housing development in College Station, the 802-bed Reve will feature a studio, one, two, three, four, five and six bedroom unit and is expected to open in August 2023. This development will be managed by Asset, based in Houston. Living.
The groundbreaking follows the impending $13 billion sale of Austin-based U.S. campus communities to Blackstone, announced in April 2022.
ACC is the largest publicly traded student housing owner and developer in the United States and owns five student housing estates in College Station.
“We really like the student housing game, there is an insufficient supply. Occupancies don’t have the rent growth of multifamily, but there’s no downside either. There’s a reason Blackstone is buying ACC and sovereigns are interested in student accommodation,” Alexander Goldfarb, managing director and senior research analyst at Piper Sandler told The Real Deal when the sale was announced. ACC.
Typically, student housing averages three to four percent rent growth and a three percent NOI
(net operating income), Goldfarb said. But income from student housing rarely sees a significant drop in a recession, he added, making the sector increasingly attractive now,
Cities with flagship state universities typically lack dormitories, due to the limited space available for development, making them an attractive asset class for institutional investors.
Of course, like any investment, student accommodation is not without risk. California-based Nelson Partners recently settled a lawsuit with investors in its former Skyloft development near the University of Texas at Austin for $50 million.
Parallel Leaders did not return a call for comment. The cost of the project was not disclosed.
Parallel’s partners on the 401 First development include BOKA Partners, Rogers O Brien Construction, Alison Royal Interiors, RLG Engineers, Mitchell and Morgan Civil Engineering, V3 Engineers, Infinisys and SMR Landscape, according to the release.