[Private Deal Alert] Real Estate Investment Offering For Student Housing At Washington State University With 21% Target Annual Returns

Leading student and affordable housing developer The Annex Group® is offering the opportunity to invest in the development of a multifamily student housing project near Washington State University with a target investor internal rate of return (IRR) or 21%.

The offering will be live on the CrowdStreet platform at 1:30 PM EDT on April 5, 2022.

The development will be a Class-A, 204-unit/399-bed student housing asset in Pullman, WA, located near Washington State University (WSU), to be known as the “Annex of Pullman.” The project will consist of seven residential buildings and one clubhouse building located on approximately 9.9 acres.

The sponsor intends to break ground on the project immediately after the closing of the offering later this month. Delivery of the project will be phased as three of the buildings are projected to be completed in June 2023 and the last is due to be delivered in the early summer of 2024.

Investment Highlights

Student Population: WSU has a student population of about 30,000, of which about two-thirds reside in Pullman. The school has the second-highest enrollment in the state and grew 6% in the five years leading up to the pandemic, while also keeping its acceptance rate relatively flat.

High Barrier to Entry: The City of Pullman does not appear to be interested in allowing additional student housing developments after the Annex of Pullman. Two potential projects were turned down after the approval of the Annex project.

There are also little to no available land parcels within walking distance of campus that could support another competitive project.

Low Cost, High-Quality Build: The sponsor is keeping the general contracting in-house, allowing them to provide a high-quality product at a lower cost than if they were to bid the project out through an external general contractor.

• Minimum investment: $25,000
• Target IRR: 21%
• Target equity multiple: 1.8x
• Target average cash yield: 4.6%
• Target investment term: 3 years

Deal Sponsor

The Annex Group® is a leading student and affordable housing developer and general contractor. The company encompasses a vast portfolio of communities valued at more than $250 million, overseeing nearly $1 billion in commercial projects.

The company’s fully realized investment offerings have all produced a positive net IRR to investors, ranging from 10% to 40%.

About CrowdStreet

CrowdStreet is a private equity real estate investment platform that provides accredited investors with access to private equity commercial real estate investments through a choice of individual deals, real estate funds and tailored portfolios.

As of March 1, 2022, the fully realized deals through the platform have produced an average IRR of 18.5% over an average hold period of 2.6 years.

View current CrowdStreet offerings on Benzinga Alternative Investments.

Kevin Vandenboss is the Managing Editor of Alternative Investments at Benzinga and has over 12 years of experience in the commercial real estate industry. Follow Kevin on Twitter for alerts and analysis on real estate and other alternative investment offerings.

Photo: Courtesy of CrowdStreet