Oxford expands into student housing management with acquisition of Arch Realty
An Ann Arbor commercial real estate company is moving into the student rental market with its acquisition of a 750-unit management company that's one of the largest near the University of Michigan.
Melanie Maxwell | AnnArbor.com
The deal has been in the works for months, but was finalized in early May, said Jeff Hauptman, president and owner of Oxford.
The deal started as former Arch owner Francis Clark learned he had late-stage colon cancer in summer 2010. Clark died Dec. 26, after he and Hauptman had organized first a partnership, followed by a sale.
"I saw a lot of value in what Francis had created," Hauptman said. "Not just the portfolio, but the people."
Arch employees are skilled in management, leasing and maintenance, Hauptman said, noting those skills also are necessary to what his Oxford staff accomplishes on the commercial management side.
"I could see (in Arch) something that would integrate really well with what I do here," Hauptman said.
The Arch portfolio is mainly student rentals, representing independent owners united under the single management banner.
Oxford is making the move into student rentals as the market near U-M is changing dramatically. Multiple new apartment projects are in construction, just a couple of years after others opened. The newer units bring a wave of updates and amenities to the market, along with higher prices. One-bedroom rentals in the 48014 ZIP code range from $600 to $1,395, according to the Washtenaw Area Apartment Association.
The new projects also also add a new dimension for landlords, said Alice Ehn, executive officer of the WAAA: The per-bed lease, instead of the traditional "joint and several" lease used among the owners of converted houses near campus.
The changes, Ehn said, "are just so dynamic."
Her organization expects to be able to better define the impact of the thousands of new rentals coming onto the market after the fall, she said. One indicator they'll watch is whether there are changes among the traditional rentals, like those in the Arch portfolio.
Despite all of the market changes, that portfolio, said Hauptman, still has room to grow.
"There's a lot of capacity here," he said, citing the efficiencies gained from the full-time management company.
Staff from Arch has been retained, and the maintenance staff has been moved into the facility used by Oxford's field technicians on West Ellsworth.
Pending changes include a search for combined office space that can accommodate Oxford's office staff, now based on South State, and Arch, based on Church Street. Combined, the companies employ 40.
Hauptman wouldn't disclose the terms of the deal, but said he expects to "continue to invest heavily in it."
That investment could result in some student rental ownership along with the management. It's a model that works for the company on the commercial side, with shared investments managed alongside Hauptman's owned portfolio.