Trends Watch: Investing in Hotels Near College Campuses

EisnerAmper’s Trends Watch is a weekly entry to our Alternative Investments Intelligence blog, featuring the views and insights of executives from alternative investment firms. If you’re interested in being featured, please contact Elana Margulies-Snyderman.

This week, Elana talks with Gary Brandeis, CEO, Scholar Hotels & Managing Partner, Real Estate Capital Management. 

What is your outlook for investing in hotels/hospitality assets near major colleague campuses?

Very positive.  Hotels near major college campuses are performing well and above pre-COVID levels.  These markets are typically high demand with limited supply, so they are atypical compared to traditional markets.  Large university communities tend to be “recession proof” which reduces risk and, in many cases, eliminates large market fluctuations. 

Where do you see the greatest opportunities and why? 

The redevelopment of existing properties tend to be best opportunities.  Land and properties within close proximity to large universities are hard to find and expensive.  As an owner / operator of our hotels, Scholar becomes an active community partner which allows us to see opportunities before most. 

What are the greatest challenges you face and why? 

Our challenges are typical for real estate in general:

1. Finding good opportunities,
2. Constrained capital markets/ tight lending environment,
3. High interest rates,
4. High construction costs, and
5. Tight labor market.

What keeps you up at night?

Too many things:

1. Finding ways to attract and retain great people,
2. Managing and mitigating risk as best we can, and
3. Managing costs that are hard to control (or we have no control over):
   1. Interest rates,
   2. Employee benefits,
   3. Utility costs, and
   4. Real estate taxes.

 The views and opinions expressed above are of the interviewee only, and do not/are not intended to reflect the views of EisnerAmper.