Uh oh, could this be a sign of the multifamily sector shitting the bed? :http://www.thestate.com/news/business/article138610933.html
Copper Beech Townhomes, one of the first in the current wave of private student housing complexes in Columbia, was sold at auction last week in a foreclosure sale, Richland County court officials said.
The 1,002-bedroom complex, off Bluff Road near Interstate 77, was purchased by Southern Drive LLC for $22 million, according to Joseph P. Strickland, Richland County Master in Equity.
Southern Drive, a Delaware-based company, sued the previous owners, Copper Beech Townhome Communities Twenty-Five LLC, for nonpayment, court records show.
The complex, which opened in 2007, will remain open and rebrand itself, according to its new management company, Southern Management Partners.
“Copper Beech will soon have the new name The Southern @1051,” said Angela L. Smith, a Southern Management partner, in an email to The State newspaper.
“With the change in ownership ... the students will experience all of the excitement and energy of the rebranding, renovation of the student center and pool, fun-filled community events for the students, bus/shuttle service for the students to USC, Benedict (College) and Allen (University) along with many other additional enhancements,” Smith said.
Copper Beech Townhomes is a sprawling, gated residential community built on a former industrial site between Bluff Road and Shop Road. Designed to appeal to college students, the complex is spacious and features a large swimming pool.
But occupancy rates have struggled at the complex as new student housing offerings closer to the city have continued to be erected since 2007. Last year in August, Copper Beech had a 40 percent occupancy rate, management officials there said. The previous year, in 2015, the occupancy rate was 100 percent, the company reported
How the fuck does your occupancy drop 60% in a year?
Could it be that the complex was built with outsized expectations re: ability of tenants to pay because in fact the market for luxury apartments is a lot smaller than developers would like to believe?
The rest of the article mentions 2 other complexes that seem to be doing well, but the thing is that these sort of projects have sprung up all over the country, and all of them are built under the same assumption: people can and will pay asking prices for rent. What's not accounted for is that all of these developments are going to be competing with each other for tenants which will means they need to be price competitive, which in turn will cause rents to drop.
Fuck, SF and the East Bay are apparently seeing drops year over year in rental rates, something most analysts would not have seen coming (even though it'll appear obvious in hindsight, much like the housing bubble).