The enrollment page of this student housing deck is one chart

Question

I've been going through notes and paper mostly, so this is my first look at a student housing offering, and the sponsor sent a 40 page deck where enrollment gets exactly one chart. Total headcount at the university, ten years, going up and to the right. That's it.

Everything else in the deck is detailed. Rent roll by bed type, pre-leasing velocity by week, a make-ready budget down to the mattress. Then the thing the whole business depends on gets one bar chart with no source note.

What I can't decide is whether that's a red flag or normal. Argument for normal: enrollment data comes from the school and the government, everyone can look it up, so why would a sponsor spend pages on public information. Argument for red flag: it's the single assumption that determines whether there's demand for 180 beds in 2033, and it got less space than the mattress line.

I'll go look up the numbers myself either way. I'm asking whether the thinness of that section should change how I read the rest of the deck.

megan_doyle15 · Answer

I'm new to all of this, but the mattress budget getting more pages than the enrollment chart does seem backwards. When I read anything now I try to find the one number that has to be true for the whole thing to work, and in a student building it seems like that number is how many students want a bed near that campus. One chart with no source is not much to hang 180 beds on.

dmitri_v6 · Answer

The deck is marketing. The documents are the offering agreement and the operating agreement, and that's where I'd spend the time. What I'd actually want from the sponsor in writing is which enrollment measure they used, full-time equivalent or total headcount, whether it includes online-only students, and what the school's own five year projection says. If they won't put the definition in writing, the thin chart is the least of it. A securities lawyer should look at the offering documents with you before you commit anything.

ehernandez74 · Answer

I'd ask a slower question first, which is what the sponsor has done at declining campuses. Anybody can show a rising chart at a growing school. What tells you something is whether they've ever owned into a shrinking class and what they did about it. If the answer is that they've only bought at flagships during good years, the thin enrollment page is consistent with never having had to think hard about it.

marcus_hale41 · Answer

Normal, and still worth pushing on. In my experience the enrollment page in these decks is always thin because sponsors assume the LP either trusts the campus selection or doesn't. Where I'd focus is the sensitivity table if there is one. Ask what happens to distributions at 88% occupancy instead of 95, and ask them to show it rather than describe it. Warrant is right that the operating agreement matters more, particularly the capital call language, because a soft leasing year is when calls happen.

gregpowell66 · Answer

Coming from the build side, the other thing missing from a one chart enrollment page is what's under construction near that campus. Rising enrollment plus 2,000 new beds delivering in two years can be worse for your building than flat enrollment with nothing new. Ask the sponsor for the permit pipeline within a mile and a half, because the city planning department will tell you for free and they know it.

The enrollment page of this student housing deck is one chart

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