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Campus Crest Communities CEO Ted Rollins on how to gain from investing in student housing REITs.
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No one's ever excited about looking for housing on college campuses.
I don't know about you guys I -- the worst time finding housing all the time what the Department of Education estimates.
That college enrollment despite all the problems you hear about debt -- sector -- student loans will hit 23 million by the year 20/20 so we wanted to know.
There was actually a way to make money off rising college costs and in -- but instead of -- shelling out the cash.
Joining us now out of Fox Business -- just -- problems -- co chairman and CEO of campus crest communities.
And you figured out a way to make money off the simply.
By fulfilling that need for the housing issue and that is student housing rates tell -- about -- company.
Well we started in 2004 with a vision to build housing across United States under one brand called the grove.
Our properties earn roughly 21 states and they provide a robust amenity package to students.
As well as a live learning environment heard from the kids the live -- and socialize and so we're not only.
Providing a place -- -- creating a social infrastructure for the.
OK so you go on -- college campuses and depending on which ones you figure out because under your three properties that are launching soon next year you've got University of Colorado there's one and Oklahoma there's Ball State.
-- and you.
Actually built the house -- we do just off campus and we have some that are on campus most of our properties are next to campus and how we go there we look at the market the enrollment trends.
We look at the rates in the market with respect to housing insulation and then we decide to build a project in -- cities.
And where then does the re formulate.
Well they're the reach an excellent way to a source capital to build out of company or around this business model.
It for us I mean there's been -- -- -- tremendously that the liquidity units offered you buy access in the public capital markets.
Has been has been excellent for -- Okay when you say excellent for you it's also what appears to be excellent for investors from the dividend standpoint you among your peers pay the highest dividend and that 6%.
Get the stock itself this is underperformance I think your ticker symbol CCT up two point 8% year over year where's the others are up double digit percentages.
Why don't lacking situation with the actual stock price flights anywhere the New Kids On The Block and we've you know we've gotten used to working in the public context and as we've done so we've started to become more study people get to know as we get out and introduce the concept.
And once they start to understand that -- by the stock in the stock performs do you believe that college enrollment is going to be -- 23 million by that year 20/20 AME out look at.
How expensive it's become.
How college graduates are not getting -- these days and I'm just wondering at some point will we see.
That sort of reverberate in fewer people saying I can't.
Spend more people rather saying I can't spend the money.
Well -- they're -- because if you look at it really breaks in the several sections you know if you if you look at.
Top tier schools or by 12% of the students going there the next tier down which are very big schools there's about 39% of the kids going there.
Our schools have an average tuition of around 8000 dollars a year which is a great value that's of great value hook right yeah and so if you look at what mom and dad -- if they're coming out of the dorms in -- coming to us we try to price right in line with the newer -- skimming school but that's charges 8000 here that's a good quality school policy -- south Alabama in Mobile, Alabama as part of the Alabama school system.
You have Pennsylvania schools like Indiana PA as a great school.
So it's just not domain name Brent and the credit crisis is finally listening so you're getting credit to build these properties closing date it as a public company we get access to credit a lot more readily than we did as a private eyes popped that credit crunch is still alive and well.
Bankers.
I don't think you've quite gotten.
Back into the lending game is like they weren't 2000 well if you.
Can provide housing that is safe with the electricity grounded.
Yes I lived in a place that didn't have grounded electricity back at Berkeley been good for you and -- investors can win in some ways you perform -- watching it to thank you so much thank you.
Ted Rollins that the co chairman and CEO campus crest communities and he founded it with his duke business school classmate is it -- like my heart.
-- got to get my credit.
