MJW Investments

California investors buy off-campus housing near UO
By Joe Mosley
The Register-Guard

A group of Eugene apartment buildings with more than 500 student housing units among them have been purchased for a total of $16.8 million by a pair of Southern California investment companies that plan to renovate the buildings with about $5 million in upgrades this summer.

“Our goal, I guess, is to go in and put a ton of money into it and really make these things nice,” said Andrew Boulton, acquisitions manager for MHE Properties of Marina Del Rey, Calif.

“We did a lot of market research,” Boulton said. “We just found that Eugene as a whole has a lot of old, kind of run-down (student housing) properties. Students and parents expect more, and our goal is really to give the students something better than they’re used to.”

The apartment buildings — a total of 10 parcels — were purchased in two separate transactions from Wentwood S.H. Limited Partnership of Tacoma, according to Lane County records.

The first group, purchased for $13 million, is made up of the Canterbury Apartments at 750 E. 14th Ave.; the Aldersgate Quads at 1436 Alder St.; the Campus Court at 1544 Alder St.; the Campus Quads at 751 E. 16th Ave.; the Woodside Manor at 1810 Harris St.; the Kincaid Quads at 1863 and 1869 Kincaid St.; and the Student Court at 951 E. 19th Ave.

The second group, purchased for $3.8 million, is the Bon Apartments in the 1000 block of West Seventh Avenue; the Holly Apartments at 795 W. Fifth Ave; and the Magnolia Apartments in the 1000 block of West Eighth Avenue.

In all, the purchases include 156 apartment units, 369 quads — four-unit clusters with private bedrooms and a shared kitchen and living space — and three houses.

The two groups of apartments are being held under the names of three limited liability corporations, but the primary investors in each are MHE Properties and MJW Investments, both of the Los Angeles area.

MHE Properties has purchased partnership interests in similar apartment properties in the past two years near the University of Southern California, the University of California at Santa Barbara, the University of Arizona and Cal Poly Pomona.

Boulton said his company plans to upgrade the Eugene properties this summer, with at least 80 percent of the units ready for fall term students. MHE and its partner companies will then hold the apartments for a period of three to five years before re-evaluating whether to keep or sell them, he said.

“Honestly, our business plan is to look at it (after a few years) and say, ‘What do we want to do from here?’ ” Boulton said.
Eugene real estate broker Jeff Elder, who has been involved in campus area housing for many years, said the purchases make good business sense.“Personally, I think it’s a smart move,” Elder said. “We’re seeing that enrollment at the university certainly justifies all the available housing that’s there … and supports a certain amount of new housing.

“The ultimate in convenience and safety is an apartment close to the university,” he said. “As long as it’s well maintained, it’s going to continue to be a popular rental property.”

The new landlords plan to update the apartments inside and out, Boulton said. Amenities will include granite countertops, dishwashers, new cabinets, new appliances and new carpet and other floor coverings. Most of the quad units also will get new “furniture packages” that include a bed, a desk and a chair.

The bulk of the work will be done after the current school year’s leases expire in June, and students give up their apartments for the summer, Boulton said.

Rental rates “are going up a little bit,” he said, with quad units starting at $399 per month and the three- or four-bedroom houses topping out at about $1,100 per month.
Copyright © 2007 — The Register-Guard, Eugene, Oregon, USA