San Diego-based Pierce Education Properties is a leading owner-operator of apartments for students living near university campuses.
We went national in 2006, and rebranded as Pierce Education Properties in 2007. Then the big recession hit. I had made the mistake of going down the road of continuing to develop the super-large and super-complex projects.
When 2008 and 2009 came around, I had to abandon those projects. They couldn’t go forward in the new world. Although I had found it fun and challenging to work on super-complex land assemblages and mixed-use developments, I also knew that it could kill me. I had to take a step back.
I had always known that I wanted to run my own real estate company; I just didn’t know what kind. My mission was to gain experience in the real estate industry so that I could ultimately run my own firm. After I had worked in a variety of real estate capacities, the SDSU Foundation hired me to work on a complex, $1 billion project to develop 131 acres of private land surrounding the university.
During the 10 years I spent working on that project, a light bulb went on. My specialty expertise would be in developing student housing. I started a company to buy real estate and develop student housing, as well as acquire already-built student housing, near Division I schools.
If I wanted to build a company, I needed something that was replicable, scalable and executable on a repeating basis.
At the same time that I was buying and developing those super-complex projects, I was also buying existing student housing, and I continued to do that. It was more simple and straight-forward. It was an understandable business plan that could be executed in a short time.
I needed to follow the old adage, KISS: “Keep it simple, stupid.” The model was not going to be developing these super-complex projects, but rather buying existing student apartment buildings in targeted university markets. Most of the buildings were properties that someone else had built. Some were in distress, but most came from developers who built new properties, got them occupied, and then sold them.
I made my product replicable by buying high-quality projects that were already occupied and generating income. Then I refreshed the buildings and made them contemporary because these days, students have different expectations. They expect to have their own bathrooms or to share it with a maximum of one other person. We build to a custom design that is intended to be occupied by students. That’s been the profitable and successful road map.