Joe Pries believes he has found a segment of Charlotte real estate that is recession-proof.
Three years ago, Pries, 36, began buying three- and four-bedroom condominiums within walking distance of UNC Charlotte.
Now, his Rampside Properties LLC owns 41 condo units in three developments. He rents them to 170 students and information technology workers on short-term assignments in Charlotte.
“The demand is insatiable,” says Pries. “Whether we have five, 10, 20, 40 or more properties, it's never enough and we sell out.”
Several national experts agree that providing close-to-campus housing for college students is a good investment in today's troubled economy. But a relatively small operator can face stiff challenges from large competitors like real estate investment trusts, said John Coumarianos, an analyst with Chicago-based investment researcher Morningstar.
Rampside Properties is a true mom-and-pop enterprise. Pries handles the marketing, leasing and upkeep of the properties. His wife, Jessica, does the paperwork, including collecting $52,000 in rents and paying 41 mortgages each month. Their monthly net: about $12,500.
Joe Pries, dressed in khaki shorts and a T-shirt, looks more like a UNCC grad student than a real estate investor. On a recent weekday, he headed to the University area in a black pickup to check on properties and meet with parents of a prospective tenant. His cell phone rang about every two minutes.
His first stop: University Terrace North, where he owns 18 condos. He pointed with pride to a new entrance and security cameras, both recently installed. He's president of the homeowners association.
Pries, a high-energy New York native, bounded four flights of stairs to a four-bedroom unit. He knocked and greeted UNCC student Lisa Barbieri. Barbieri, 21, of Asheville, is one of four renters. She said she will stay at least another year.
“It's nice here,” she said. “He (Pries) keeps everything fixed.”
The condo has a central living area with a well-equipped kitchen. The living room is tiled and each bedroom has a wood laminate floor and tiled bath.
Pries said the tile and laminate floors are a strong selling point because they are stylish, easy to clean and keep allergens at bay. Whenever he buys a condo, he phases out carpeting as soon as possible.
Rampside Properties charges rents ranging from $305 to $355 for students and $390 to IT workers. Most of the IT workers, he said, are young men of Indian descent who come to Charlotte for short-term projects with banks.
Pries matches workers or students of the same gender to share condos. In the case of students, he requires their parents to co-sign leases. Because of this, he said, he has relatively few problems with payment and behavior.
His main competition for the student market, he said, are other nearby condos owned by REITs. While they offer pools and weight rooms, Pries said he beats the competition in price and service.
Morningstar's Coumarianos said providing housing for students is a hot investment for REITs and at least one publicly traded company, American Campus Communities. That company's stock price is up about 9 percent in the last year, while major stock indexes and Bloomberg's REIT Index have fallen.
Kenneth Harney, a syndicated housing writer, said in a recent column, “Student housing in major college and university towns has been one of the steadiest performing niches in real estate throughout the current down cycle.
“After all, no matter what's going on in the economy, college students are still flooding campuses, they still need a place to live, and they strongly prefer private rental housing over dormitories,” Harney wrote.
In Charlotte's University area, housing demand is expected to increase. Enrollment projections show UNCC will have more than 30,000 students in 10 years – a more than 30 percent increase from the 23,000 or so expected this fall.
Coumarianos said because student housing is a competitive market, “Property management is increasingly important. Students increasingly want amenities and it may be harder for a small investor to provide them.”
Pries said his leasing population is less interested in amenities than in competitive pricing and proximity to the campus.
His business has increased each year since 2005, he said. But it's harder and more expensive to buy condos within walking distance of UNCC.
“Three years ago, I bought the most atrocious units out there, cleaned them up and made them top-notch,” he said. “It was an amazing feeling. But now it's getting harder to find good deals.”
Nancy Stancill: 704-358-5000; nstancill@charlotteobserver.com.
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