Hundreds of millions of dollars are changing hands thanks to a complex deal involving a State College-based student rental company. Copper Beech Townhome Communities is being acquired by Campus Crest Communities.
The first phase of a 36-month process has already been completed. Campus Crest has paid $261 million for a 48 percent share of Copper Beech. Campus Crest will buy the remaining 52-precent of Copper Beech over the next three years.
Copper Beech, which focuses on townhouse style student housing, has several properties in the area including Copper Beech I & II, Oakwood, Oak Hill, Northbrook Greens, and Parkway Plaza. The properties in State College won’t be affected by the purchase, at least not anytime soon. “They will still be known as Copper Beech townhouses. They bought the properties, the name, everything,” said McWhirter.
Campus Crest is the nation’s fourth biggest student rental company. It’s buying the fifth largest in Copper Beech, which owns 37 properties spread across the country. Copper Beech Founder and CEO Jack McWhirter describes the deal as, “the biggest acquisition that has ever occurred—by far—in the student rental business.”
McWhirter earned master’s and doctoral degrees in chemical engineering from Penn State in 1961 and 62 before founding Copper Beech in 1994 and growing it into the largest privately-owned student rental company in the US.
Once the entire deal is completed, Campus Crest will have paid in excess of $400 million plus payments of Copper Beech’s debts of nearly $150 million. That’s a lot of money. McWhirter says, “Essentially, by combining the two companies you have a billion dollar deal.”
Campus Crest (which operates as The Grove) will eventually control nearly 40,000 beds in student housing. That will easily make Campus Crest the second largest company in the business.
According to McWhirter the deal won’t immediately affect Copper Beech’s private standing, “Campus Crest is currently a public company. Copper Beech has always been a private company, is still today a private company but is partially owned, today, by Campus Crest Communities.”
Although Copper Beech will maintain its own management of day-to-day operations during the 36-month acquisition period, the CEO of Campus Crest, Ted Rollins, has placed himself on the two-seat Copper Beech board of directors, and major decisions require unanimous consent of the board.
It’s a big move but with Copper Beech’s 98.5% occupancy rate — compared to Campus Crest’s 90% — Campus Crest is hoping it can ride Copper Beech’s success with its progressive townhouse-style student housing designs. “Copper Beech has bought a few properties that haven’t been townhouse style units, but the only thing we have ever built is our townhouse style. They will keep the Copper Beech name and continue to build that style,” said McWhirter.
Asked if he’s planning to retire, the 75-year-old McWhirter indicated there might be new ventures down the road, “I’ve already retired twice and it never seems to stick”.
