Recently Formed REIT Targets Blend of Student, Senior Housing

Strategic Student & Senior Housing Trust (SSSHT) is forging ahead to build a portfolio of senior housing and student housing properties, seeing synergies between the two and the potential for co-locating them.

SSSHT is a public non-traded REIT sponsored by SmartStop Asset Management, a Ladera Ranch, California-based diversified real estate company focused on self-storage properties. Along with its affiliates, SmartStop has about $1.9 billion of real estate assets in its portfolio, including 117 self-storage facilities in the U.S. and in Toronto.

SSSHT has four senior living properties in Utah and Oregon and two student housing properties in Arkansas and Florida. The REIT acquired its senior housing properties in February 2018 for an aggregate purchase price of more than $170 million.

The company currently works with two senior living operators: Carlsbad, California-based Integral Senior Living (ISL), which manages one community in Portland, Oregon; and Irvine, California-based MBK Senior Living, which manages three communities in Salt Lake City and Cedar Hills, Utah.

John Strockis, president and chief investment officer for SSSHT, believes the demographics driving the growth of student and senior housing are strong, and that the industries mirror the trajectory of another familiar property type: self-storage.

“Like self-storage 15 years ago, student and senior asset classes are a little bit below the radar,” Strockis told Senior Housing News. “We really want to parallel what we did with self-storage 15 years ago … acquire them, understand them, brand them.”

While the company has yet to establish a unified brand name for its senior housing portfolio, its student housing properties operate under the YOUnion moniker.

“We think the brand is really important to folks,” Strockis said. “We’re working on some exciting things.”

Pairing student and senior housing isn’t common in the senior living world. But it’s a growing trend, and there are companies that are undertaking projects which blend both product types, such as developer Valeo Groupe Americas and non-profit senior living company Pacific Retirement Services (PRS).

Looking ahead

SSSHT is currently focused on raising additional equity, which it will use to acquire new senior housing properties and reposition its portfolio.

As for properties it will acquire, the company is targeting value-add properties that may benefit from some renovations. If all the pieces fall into place, SSSHT could complete two to four acquisitions a year.

“Forty-five percent of all senior living communities are age 15 years and older,” Strockis said. “So if those can be acquired at the right price, we can bring in our design and construction teams and expertise.”

That may include opportunities to co-locate senior housing and student housing, similar to what PRS is doing with Mirabella at ASU, a 20-story highrise life plan community on the campus of Arizona State University.

“We know student housing pretty well, and we love the idea of putting senior housing next to a college campus,” Strockis said. “We’re really open-minded when it comes to integrating generation Z and the baby boomers.”

As for monthly rates, the company is targeting more middle-income pricing starting at an average of about $3,000 to $3,500 for a one-bedroom independent living unit.

On the repositioning side, the company is already expanding its Courtyard at Mount Tabor property in Portland with a new 29-unit memory care building. That expansion will open its doors in November with a topping-out ceremony where a resident will place a tree atop the newly built structure — an old Norwegian tradition, Strockis said.

“The metaphor is, I’m alive, I’m living, I’m championing a custom that is important to me personally,” he added. “This is what people want to do [in senior living]. They want to go somewhere to live and thrive.”