Pioneering Student Housing and Scaling a Development Business with Jared Hutter

Purpose-built student housing wasn't always an institutional asset class. When Jared was tracking the sector in college, two public companies dominated it and most developers hadn't touched it. His first deal in Syracuse required staking out an unresponsive seller on his morning commute just to get a conversation going — and delivered 40% net returns in 18 months when it sold to a publicly traded company.

From that first project, deal sizes have grown from $18 million to $100 million-plus, and the capital stack has evolved alongside them. What started with friends-and-family money has shifted toward institutional partnerships as the sector matured and larger players began paying attention. Aptitude has stayed ahead of that curve by sourcing deals directly, doing the heavy lifting on underwriting before ever approaching a capital partner, and being selective about the markets worth betting on.

In this episode of The Dealmakers' Edge, Aaron and Jared discuss how he broke into student housing before institutions cared about it, why large state schools are the only markets worth betting on long term, how to design buildings that hold up against 18-to-22-year-old tenants, and the mindset that keeps him steady through the volatility of development.

1:20 - Falling into real estate by accident and discovering entrepreneurship through development

7:19 - The eight-month pursuit of a seller that launched Aptitude’s first project

11:15 - The importance of disciplined land basis and refusing to “lie to yourself” in underwriting

13:58 - Scaling from friends-and-family capital to institutional partnerships

18:10 - The set-up of Aptitude’s executive team and launching an in-house management platform without team bloat

23:19 - Why student housing is operationally intense, but fundamentally durable, and designing for durability with 18-22 year old tenants

28:23 - Competition within the student housing asset class and why large state universities represent a long-term bet on enrollment stability

33:06 - Creating liquidity through quality construction and long-term market selection

34:19 - Jared’s resilient mindset for when things aren’t going well

Mentioned In Pioneering Student Housing and Scaling a Development Business with Jared Hutter

Aptitude Development | LinkedIn

Jared Hutter on LinkedIn

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Transcript

Aaron Strauss: You’re listening to The Dealmakers’ Edge with A.Y. Strauss, diving deep into stories behind commercial real estate leaders.

Hello, everybody. Welcome to The Dealmakers’ Edge. Today, we are joined by Jared Hutter, who is the co-founder of Aptitude Development, which is a firm he established, which has a reputation pioneering purpose-built student housing across the U.S. His eye for untapped markets, skill in project entitlement, and commitment to developing a premier student residence define his approach. At Aptitude, Jared’s in charge of site selection, acquisitions, diving deep into market site feasibility, financial analysis, raising money.

Before Aptitude, he was working in construction acquisition management of properties valued at $700 million across diverse sectors. He graduated from Syracuse and Columbia, and his story is compelling, and I hope everyone enjoys it.

Hello, everybody. Welcome to The Dealmakers’ Edge. Today I’m excited to have Jared Hutter with us today. It’s going to be a fun conversation because Jared’s been doing a lot of great, interesting deals in a very niche sector. We’re going to learn all about it. He’s also a friend of mine, and I’ve really gotten to know him over the years. He’s a lot of fun to hang out with. He’s very smart. He’s very driven. We’re going to hear his story today.

Jared, thank you so much for being on.

Jared Hutter: Thanks for having me.

Aaron Strauss: Usually, we go back to the roots to fill in. Obviously, you’re developing all these really cool projects, but a lot of our listeners like to know where people grew up, how they got started in the business, so on and so forth. You went to Syracuse, which actually really ties into some of the early development, of course, but maybe you could talk about where you went to school, how it influenced you, and then, I guess from there, how you got started.

Jared Hutter: I fell into the real estate world by accident. I always thought I’d be an investment banker. I like the stock market, still do, especially these days. But certainly, I never really saw real estate as a path. I kind of fell into it by accident.

I got an internship when I was in college with a big real estate company and just fell in love with it right from the get-go. That company ended up offering me a job for after college. So I went back to school my senior year, already had a job, really just trying to survive at that point to get to the end there.

But I spent two years at that real estate company. When I got there, my boss had told me, he said, “I’m kicking you out in two years to go to law school.” I said, “There’s no way I’m going to law school.” Certainly, that wasn’t my path. In hindsight, probably would have been a really interesting take for things. I think it wasn’t about becoming a lawyer. That was much more about the education you get at law school, the thought process you get, things. Certainly, there are tons of executives out there who have that background, didn’t necessarily practice law, but got that.

But that was never something that really interested me. Going back to school for three-plus years really was not something that I was interested in. I was already working and wanted to go build from there. So I compromised, and I went back to school. I got a master’s in real estate development from Columbia. So I went to Syracuse, and I went to Columbia for a master’s.

That was a really phenomenal program. That was where I really learned how to be a professional at that point, got some great education, and got to see the world in a very different way. I came out of grad school in 2009. At that point, the world, obviously from a financial perspective and real estate world, was very different than it was the handful of years prior. So coming into the world at that point and trying to go make a career certainly had a lot of its challenges.

So at that point, I got together with a small developer in New Jersey and did deals for about five and a half years, really learning the business. I was entrenched in all of that, did a little bit of everything. We managed some mobile home parks. We built some retail. We redeveloped some office. So a little bit of everything.

But certainly, in real estate, or not necessarily real estate, but for me, I always had my eye on building something bigger. I always had my eye on, “I am an entrepreneur at heart.” At Syracuse, my major was finance and entrepreneurship, not necessarily a real estate background, but I think that really plays well into it. To me, building a business was something I always wanted to do. I think that really fed well into being a real estate developer because in real estate development, you’re building buildings and you’re building a business, really a new business every single time. There’s a new case theory to go through. There’s a new investment decision to go through.

So I cut my teeth working for somebody else for a while. But eventually, my wife was six months pregnant, and I came home one day and said, “I think it’s time. I’m going to quit my job tomorrow and go out on my own to go start this real estate development company.”

That really ties into the student housing world because student housing was something that, when I was in college at Syracuse, I saw starting to pop up, not necessarily at Syracuse, but two of my friends had sent me links to where they were living at other schools at one point. I said to my roommate, “Hey, we should come back here and build this stuff one day.” Where we were living was perfectly fine. It was a four-bed, one-and-a-half-bath apartment, tons of space. But seeing what this stuff—this was 2005—seeing where this stuff was starting to pop up with these brand-new buildings, amenitized.

Truthfully, what really intrigued me about the student housing world was you get all these kids, hundreds of kids, living in one building together. I was like, “That’s really cool,” especially in a place like Syracuse where it’s freezing outside. So to have everyone in the same building, I thought would be something really interesting.

So student housing was a sector that I was watching for a really long time. As I started to get interested in real estate, I was watching the student housing world. We had two public companies in the sector at that point. There was EDR and ACC. I was watching those. I was reading their quarterly reports. I was seeing what they were up to, really getting educated on the players.

So when I finally did go off on my own with the intention of going into student housing, I knew the landscape. I probably thought I knew a lot more than I did at that point, but I definitely understood who the players were, the metrics, the language. I think I came into this sector with a little bit of knowledge as opposed to just a crazy idea. It was probably 90% crazy idea, 10% knowledge at that point. But maybe that’s flipped a little bit over the last handful of years.

That’s what we did. We went back to Syracuse, and we built our first deal up there, which was a really nice exit from a perspective of returning capital to investors. We made our investors 40% net returns in 18 months. We built a building that still stands there today. It’s something that my partners and I are very, very proud of and helped put us on the map.

Getting out of that deal was something we had to do, just given the size of it, it was a little bit small to operate on its own. But the investment profile of that and also ultimately selling to a publicly traded company really gave us a lot of credence to move forward.

Aaron Strauss: And credibility, too. I think there’s another key point here. You’re not just buying real estate and making a thesis around that plan. You’re developing it out of the ground. I think that’s huge. I think the vast majority of people in commercial real estate are not developers in the truest sense. Maybe they’re doing value-add or they’re finding a way to increase NOI, or maybe they’re getting a new tenancy, et cetera. But at a young age, to just say, “I’m going to create something on this ground that did not exist,” that’s incredible.

It’s really cool you started where you went to school because you literally had tremendous feel for the neighborhood and how the students operated. You weren’t a student too far beyond the past when you developed that project. It was 2014, I think, if I remember the right year.

Jared Hutter: That was when I left to go start this. So we broke ground in 2015. I sent my first letter of intent for that property in February of 2014. We didn’t sign the contract until October of 2014 and get going.

The reason being, I had identified the property. It was a vacant medical office building. I was working with some brokers up in Syracuse and a couple of other markets we were looking at. When I say we, by the way, it was just me. But “we” always sounds good.

So I’m chasing this deal, and I’m going after it, and the seller just wouldn’t get back to me. I make an offer. Then they say yes. Then the brokers stop calling me back. I had nothing else to do at this point. I’m like, “I quit my job. I’m chasing this deal. I’ve got to get this thing going.”

I really had no choice at that point. I was living in New York City. The building was in Syracuse. When I came down to learn, because you're researching everything, the seller lived like nine or 10 blocks away from me.

I figured out where his office was. I was all the way on the West Side. He was even further on the West Side, and his office was on like 56th and 8th. So I knew the way he was probably going to have to walk to work when he would go there.

So because I had nothing else to do at certain points, I would sit in my car on his corner, and I'd wait for him to come out walking to work in the morning. Sometimes I'd see him, sometimes I wouldn't. I would just bump into him and be like, "Gary, what's up, man?" Because he wouldn't return my phone calls.

What I learned later on was he really just loved to negotiate. He had a vacant building, obviously wasn't earning any money. He was spending dollars on this thing. But the guy just loved to negotiate and was in an interesting position at that point.

But I think it goes back to your point, developing is such an interesting skill, and it's such a different part of the market, that you're taking something from nothing to everything, that you have to get creative to be able to get these deals done at every single step of the way. From a development deal, first you got to convince a seller that you're going to do this. Then you got to convince investors. Then you got to find the right architects to be able to help you go decide and bring that vision.

The first architect we hired for that building completely didn't understand the vision. He was telling me, he's like, "Oh, I'm designing these two-bedroom apartments and they're 900-plus square feet apiece." I'm showing him, I'm like, "That's not what student housing is."

I was taking floor plans from other buildings and saying we can build two-bedroom apartments that are 630 square feet. He just couldn't get it. So I think in the development world, I look at my job as I'm putting the entire team together.

I'm almost like a general manager from that perspective, where I got to make sure everyone else is doing their job, and I got to find the best people to do their job time and time again.

Aaron Strauss: That's a cool story. I didn't realize how much you stalked this guy, Jared, in retrospect.

Jared Hutter: It took me eight months. I literally had to stalk the guy for eight months. At one point, he raised the price 50% on me. I said to him, "Gary, if I agree or I get my partners to agree, which, again, my partners didn't even exist, but will you sign the contract?" And even then, he wouldn't say yes, necessarily.

So it was a big slog to get there.

Aaron Strauss: But also you burn the boats. You left your job. You had no choice but to make the deal.

You had to walk the fine line between being overly eager, dare I say, appear desperate, but also make the deal. A lot of times I think people give up. Sellers are not interested. Okay.

You just went to bat again and again and again because you had the vision. Eventually he just probably figured, there'll be nobody on my case as much as Jared, I have to sell to him. That's probably what pushed your career in this way.

Then speaking of which, you had the momentum of that deal. When you started, it was just you. But I remember as you had that success, deal number two, all of a sudden you had a family office interest. All of a sudden, I'm sure from deal three, it continued, the skillset, the development.

You went into Kentucky, South Carolina, Alabama, Missouri. I don't even know how many states you're in now, but maybe you could talk about what a difference it is to deal number two or three versus one. I mean, literally, you're staking this guy out in your car until all of a sudden, I'm sure now, deals are coming to you with bigger opportunities.

Jared Hutter: Yeah. I mean, look, in the beginning, there was a big slog. We're trying everything we possibly can do. But I think we still have that same mentality as a company, because yes, deals come to us right now, but we've built about 5,000 beds across the country.

I think we've created every single one of those opportunities the same way we did the first one. Maybe not as aggressively having to stalk somebody out, but it's always been us going out there.

I think some of our secret sauce is we identify markets, and then we say, we want to be here and let's get involved. Let's start going to that market. Let's look around with our own eyes and say, okay, that's an underutilized piece of property. Let's figure out who owns it and go from there.

We've partnered with landowners numerous times because people may have a retail store or pizza place, something like that, on the location. Owner-operators are going to operate very differently than people who just own the real estate and they have a tenant in there.

So we've had to create the deal every single time. I think that that's something we're really proud of as a company because that's the way you get the best deals.

When deals get mass marketed to us, there's probably people who are willing to pay more. There are some huge players in our space who, a million dollars extra here or there, they make that work.

But to me, the number one rule was, don't lie to yourself and don't have the bad basis going in. I think those are two things, but they're really the same. Don't lie to yourself on the underwriting and start from behind.

So if you're paying too much for the land from the get-go, you're going to convince yourself up front, no, I'll make it up on the back end. I'll figure out a way to cut costs somewhere else.

But I think having that discipline up front is really a key in development. It's probably key in all real estate deals. But for us at the moment, all we do is development.

I've looked at some value-add deals over the years, but we've never executed on them. Development is the place that we really enjoy playing.

Aaron Strauss: No, it really plays to your strength because you're the chief snow shoveler. You bring every problem to you. You'll find a solution. That's your approach.

We could talk about asset class, but maybe I want to talk about investors too. As you become more experienced, your name, your brand, it's one thing to do one deal and another to have 5,000 beds.

Then I'm sure you've got a lot in your pipeline now, but we could talk about pipeline too. But as the deals start to scale, the complexity scales, the pipeline scales, so too your investors have to scale as well.

So I remember when you started, it's more, perhaps, friends and family, family office. I'm sure now you're at the league where more institutions are taking a hard look at what you're doing.

Maybe you could talk about pairing the capital to the scope and complexity and the velocity of what you're doing in real time and how to navigate those two things.

Jared Hutter: Sure. So there are a couple of things there. I think the deals are getting bigger. So that naturally, the first deal we did was an $18.5 million deal.

I got $13 million of debt, $5.5 million of equity, both large numbers when you think about it. But in the scale of things, now the deals we're doing, everything we're looking at and pursuing is all $100 million plus.

So the scale of these deals is just getting significantly bigger. So that has forced us to really move more into the institutional side and work more with institutional groups.

I also think from when we started until where we are now, there's a lot more institutional interest in student housing. It's become a much more institutionalized asset class where institutions are much more willing to get involved in this space.

That's opened it up as well, with a lot more people having an interest coming in there. But it also goes even to the beginning of the deals where, because they're so much bigger, the pursuit dollars on these deals are getting bigger as well.

So we used to be able to chase some of these development deals for $50,000, $100,000, $150,000, but you can't do that anymore. The deals themselves now cost hundreds of thousands of dollars to chase these things between legal fees and design fees and getting down there and getting with it.

You have municipalities now who are demanding more. There is a deal we're building in Arizona State right now, Tempe, Arizona. They pretty much required a full SD set of plans just to go through the approval process.

So that alone, that was probably a $500,000 to $600,000 approval process. There's a risk there for sure. If you don't get approved, that money's really just gone.

Now we think we can mitigate that risk really well by sitting with the municipalities up front. I was willing to take that risk because they're very pro-development out there.

We sat with the folks, and we got to understand that if we do X, Y, and Z, the approval should be there. There's no guarantees, but the approval should be there.

Over these last 12-plus, 13 years of doing this, we've only been denied three times across the country. So I think we're really good about picking our spots and abandoning things very quickly.

But when we sign a contract, we fully intend to go do a deal. So we're not the kind of group that just ties things up and runs around and says, oh, we'll figure it out later.

I don't have the dollars to do that. I don't have the time. I don't have the personnel to do that.

We've built a really great team here, but I need everybody on this team working hard and working towards things that can ultimately come to fruition. We don't have the luxury, like some groups might, of tying things up and seeing where they land. So that ultimately forces us to do a lot more homework up front, which then plays into the capital side.

By the time we're talking to these different institutional-type partners, we've done a lot of homework. We're not selling them on the concept of, hey, we're going to do student housing. Do you want to follow us? It's, hey, here's the deal. Here's what we've done so far. Here are the contractors we've spoken to. Here are some real numbers that we've put together to get people excited.

So I think from an institutional investor standpoint, they really like that because we do a lot of the legwork up front. I don't want to waste people's time. I don't want to run to a potential partner and say, hey, would you do this or would you do that? It's no, we believe in this deal. Do you want to be our partner?

Aaron Strauss: Exactly. I think the investors appreciate that too because they don't want their time wasted either. Their pipelines fill with potential partners as well. I think that'll continue to enhance your credibility the more deals you do and the way you can lay it up for them in a way that they can analyze it quickly.

Let's talk about your team today. You've done a lot more development year over year. Every state is different. Every property has its own challenges. You're one person. I know you get pulled a lot. How's your organization set up today? Are you looking to scale more considerably? Is that organization going to evolve more? Maybe talk about team today, potentially team in the future.

Jared Hutter: I've built the business with my partner, Brian Rosen, and he handles the construction side of things. He knows way more about construction than I ever will. As a development shop, I think that's crucially important to have somebody like that as a partner.

I would also say when I got into this concept, I was one of the partners. I like the idea of bouncing ideas off other people, somebody to keep me in check as a developer. I'm definitely a little bit of a cowboy at times and want to be aggressive. So I very much appreciate having a partner who can be a little bit more conservative at times, rein me in, but also wants to grow and wants to go out there and do a lot of deals.

So we've had a phenomenal partnership for the last 12 years and hoping it lasts for another 20, 30, 40 years. I fully intend to keep going at this, and we've got that going. So that's the top of the funnel right there.

Then we've built a really good organization under us. Most of the people we've hired have been with us for a really long time at this point. We've got a COO who started us kind of like an early asset manager and has really grown into the chief operating officer role.

We've got a gentleman who came in who found us and was aggressive and said, "I want to work for you guys." I was like, "I don't have time for this." At the time, I had one employee. He was chasing us down. He's a partner with us and a VP of development and helps find all of our new deals, has worked really closely with me, and has become a trusted ally.

We've got a great CFO at this point who's been with us for a couple of years and started as a financial analyst, just another smart person. Then we got a couple of people under that who work throughout the organization, whether it's helping out on the development side, helping out on asset management, helping out on the operations side.

As a small organization, there are about 10 of us in the office on the executive side. It's always an all-hands-on-deck. There are definitely roles and responsibilities, but we operate where everybody gets involved in everything because I like bringing that perspective.

When you think about development, it's not just about, hey, do we like this market? The operations people come into the design meetings, and we're designing these things, and they give great input of, hey, this works well in other buildings. That doesn't work well. They give their thoughts because, yes, there's going to be similarities throughout all the buildings that we build, but every site itself has its own unique challenges from a size perspective or a layout.

So we're never building the same building twice, as much as we can take and learn from everything. So from that perspective, we've learned that it's really important to have the entirety of the team, regardless of your role, being involved in various stages of the design process. So I think that has been really helpful as we've grown this.

Last year, we launched a management company just for our properties. So in addition to the 10 people we have on the executive team in the office in New Jersey, we probably employ about 60, 70 people throughout the country, throughout the various properties and things that we operate.

So we've taken a lot of control of that. We moved from third-party management to a much more in-house integrated. We did that as a joint venture with a large management company.

I didn't want to replicate the back of house, accounting, legal, HR. So that was one benefit of it. But at the same time, I also like learning from others, and having a large management company as part of that venture, we get to learn best practices. They're managing tens of thousands of beds across maybe 90,000 beds at this point. So we get to learn from that.

From a resource perspective, we get access to a lot. So it's been a really good run as we've grown just out of the development side into also really taking over the operations of the business.

Aaron Strauss: That's awesome, Jared. I think that's a great way to scale, leverage best practices everywhere you can without having to learn a whole new business on top of a whole new business.

Jared Hutter: Right. I have no interest in building a 100-person organization here. We're not going to have these massive marketing teams. We're not going to have a million asset managers in the office.

I look at this, and there are some peers and competitors and larger companies of ours in our sector who have hundreds of people in the office there. I love coming into the office every day when there are 10 people. Could we add a few more? Absolutely.

But I don't see us growing as a company from an executive personnel side too much larger because we've got a phenomenal culture. That's something that everyone in the office, I believe, really values well.

Eventually, when you get to a certain point and you've got a lot of people, that culture is going to go away. That's natural when you have that many people. So that is something that I think about a lot in terms of how we continue to scale.

But to your point, it's about leveraging others. I don't necessarily need to bring everything in house. I can keep replicating with the same third-party professionals that we use all the time.

Aaron Strauss: For sure. Let's talk about the asset class. Obviously, it's very niche. It's a super cool asset class because you know the students are going to show up every year, and you know that parents are going to be paying for their students to show up every year.

They've been, oftentimes, saving their life for these students to go there. At the same time, students have reputations. Think back to your college days. It's not the normal tenancy, a lot of wear and tear, a lot of turnover.

How do you mitigate those issues? Student housing sometimes gets a bad rep, but at the same time, it's an incredible asset class because you know well in advance, for years on end, these institutions have been around. Often that's hundreds and hundreds of years. You're going to have a great tenancy base.

So how do you balance those two issues between the fact that students are students and always will be such, but the stickiness of that asset class as well? How do you portray that to a new investor, a novice investor in the asset class? What should be exciting about the asset class, and what should be a mitigation risk as far as the short term of the tenancies and the type of tenants that are in the buildings?

Jared Hutter: So it's definitely not the animal house that people naturally think about, but it's not necessarily as easy as, say, a multifamily building either, because the challenges are exactly what you said. Theoretically, you lose 100% of your tenants on the same day every year.

Typically, our buildings will have 30%, 40% renewal, but all of our leases end typically July 31st. So you've got to work. You're constantly leasing for the following year. So there's a lot of operational intensity there. So you have that. You think about it every day.

You lease it by the bed. So you have every bed to lease. You got to market these things two or three times because you got to get the kids excited. Then you want them to get their parents excited.

So sometimes you're dealing with both parents at a certain point. So you must have two to three clients or customers for every single lease that you have. So you want to get the kids excited by the fun of the building, the things that you have in there, the amenities and everything. But then you got to sell the parents on it as well because you want the parental guarantors, because that mitigates a lot of that risk.

So there's that operational intensity there where you're trying to deal with everybody and then add the fact that your clientele is 18 to 22 years old. So a lot of them haven't really lived on their own before this. So you've got to handhold a lot. Parents are constantly calling, so there's a lot there.

Then when you think about the wear and tear, as you mentioned, that goes back to the design of the building. When we design these buildings, we think about that a lot.

You want to put a lot of durable materials in throughout this. You want the rubber base on the floor around. Is it the nicest-looking thing? Not really, but the bottom of the floor is going to constantly get banged up.

So do I think having a nicer base on the floor most of the time will add to the revenue? Not really. So it's about finding those durable materials and using things like we stopped putting nice light fixtures in the units.

It's all LED hi-hats now. That's something that lasts a lot longer. They're more energy efficient. But more importantly, it's less things for kids to knock down and break throughout there.

So thinking about that, the materials that you use throughout are really important because we're going to have to live with that. We're going to have to repair those over and over again. Yes, while we're going to have security deposits when we can go back a lot of times and charge people for damages, A, you don't want to get the reputation of nickeling and diming students, right? Because then that reputation will live with the building for a long time and will potentially hurt tenancy later on.

But at the same time, you want to do the right thing, right? Normal wear and tear is what people are paying for. So we're going to have to fix this and clean this up every year.

The type of paint you use on the walls is really important. So all of those details throughout the unit and throughout the building are really important. It starts with just the design on the paper and the conversations with the architect up front of what's going to last a long time, right?

Like the right cabinets. You don't want to overbuild them, but you don't want to have really crappy cabinets in there because those things will fall off the wall, or kids will accidentally put a hole through there or purposely put a hole through there. It goes back to the durability and really knowing your customer.

If we understand who our end user is, we can design accordingly. So we spend a lot of time getting to know our customer and that, yes, it's generic, it's a college kid, but every market's going to be very different.

Then the last thing I would add to that is what we have found over these years is that when you give people something good quality, they typically do take better care of it. Not everybody. You're going to have damages every year.

But I think when you do deliver people a fairly good product, for the most part they take pride in it and they do take care of it to a certain degree.

Aaron Strauss: Well said, Jar. Yes, I think everyone's thinking Animal House when they think about student house.

Jared Hutter: As they should. By the way, I hope a lot of people still think about it because there's still tremendous opportunity in student housing moving forward, but we got enough people playing in this space. We don't need everybody continuing to come here.

Aaron Strauss: Exactly. A little fear is good for the business. Well, maybe you could talk about just big picture. It does seem like more competition's heating up. They watch developers like you have success and take your methodologies and approach to the market and the sector.

You're probably seeing more and more developers go into it. Do you feel like it's getting more crowded than it should be? Is there a lot of room to run?

I mean, there's only a certain amount of universities, certain amount of housing stock. On the one hand, there's a lot of room. The housing stock gets old. The enrollment goes up. But again, it's not exactly blue ocean either.

These properties are usually coming within already sophisticated ecosystems. So do you feel like from a deal flow perspective, you've got more and more to look at because there's something else that always has to be upgraded, or do you feel like it's harder to find deal flow in your sector than, for example, just in general multifamily?

Jared Hutter: All of the above. I think that there's definitely been a lot of players who have run to it. Not as much on the development side, right?

So I think that that has obviously helped us a little bit, both in terms of not crowding the competition on the development side, but also when you have more players looking to come in and deploy dollars and backing a lot of people, that helps create liquidity on the other side, right?

So when we do look to get out of these things, I think that the amount of players that have come into this has really helped our ability to, A, attract investors, but B, get out of it. Those obviously go hand in hand because if you're coming into a development deal, you want to know what the exit plans are ultimately going to be.

So whether it's a refi, whether it's a recap, whether it's a sale, you want to know that there's real liquidity on the other side. So the interest in the sector I think has been extremely helpful.

That being said, there are about 8,000 universities in this country or some higher education. Right now, if you talk to the institutional investors and start thinking about it, everyone says, "I want to go play at the Power Four type schools." So that whittles that down to 150 type schools.

There are maybe 200 investable type schools on the high end. But then for us, considering we're really only focused on development, that number is significantly smaller. We're looking at 50, 60, 70 markets at most as potential places to play.

So when you think of it from that perspective, yes, there are tremendous amounts of universities out there, but we've really whittled down the markets that we want to go to. There's a handful of metrics that go into that, right?

Like I think the large state schools are going to continue to get bigger. The value proposition of education is something that students and parents are thinking a lot about right now. So we're very focused on state institutions, again, because of that value proposition.

It's not just whether people can or cannot afford the $80,000 to $100,000 a year school. People who can afford it are making smart financial decisions.

There's been a lot of debate over the last couple of years of, "Do you still need to go to college?" And I would argue all day that, of course, you do. I'm not saying that just because that's our business.

But I'm arguing that from the perspective of you can't replicate the college experience online, right? You can't take classes and get that same experience.

The way education is delivered is absolutely going to continue to evolve. It has changed. There have been more online classes.

The way it's going to continue to evolve, especially as AI looks to deliver this stuff. But the large state schools, when you think about it, they do a handful of things, right?

They drive local economy where they are. They're huge state institutions, right? So they're big pieces of state budgets. They have a tremendous amount of jobs that are there.

They have massive endowments. So they're asset managers from that perspective. So the states themselves have this huge vested interest in these universities getting bigger.

So the small liberal arts schools, I'm not going to say whether we should or should not bet on them. I wouldn't necessarily want to bet on them right now.

I'm not going to bet against them so fast. Not that you can short a school, but I wouldn't necessarily bet against some of those schools.

But I'm looking to place bets on markets that we feel really confident are going to continue to grow. That comes back to the state institutions.

So we're doing deals right now. We're building at SUNY Binghamton, and we're building at Arizona State. Two fairly different schools, but the similarities are they're great state schools, right?

So they both have really good feeder programs into them. We're looking at deals right now. We have deals that we're pursuing at NC State and University of Central Florida and University of Michigan and University of Delaware.

So a little bit of a wide range. Delaware may not fit into your typical Power Four type school. But great school, right? State school attracts tremendous amounts of wealthy kids in the Northeast that go there. So we whittle it down and we really try to say, let's get to know the school. Let's know our markets. Let's know our customers and go to places. We think about it and say, let's build buildings in markets that if we still own this in 10 years, we're happy with our decision. That goes back to construction quality. That goes back to the markets that we're in.

We probably won't be in all these markets for 10 years, but it's very important to me if we're making a bet, A, we don't get stuck later on if we're still in that market. But also if we're going to turn these buildings over and sell at some point, why is somebody buying them, right?

They need to have that same long-term vision that we had going in. It can't be a two-, three-year vision. Somebody else is going to go pay us, hopefully, a lot more money than we built these buildings for because we've created value, but they need to see the runway moving forward.

They're not paying us for past performance. They're paying us for what they believe they can do moving forward.

So we sold the building last summer at the University of Arkansas. I was just with the buyer last week, and he complimented the construction quality for us.

He said, "Guys, this is one of the best buildings we've ever bought in terms of construction quality." I was like, "Thank you." We're really proud of that.

I told that to my partner because he oversaw that much more than I did from a construction quality standpoint. We're, as a company, very proud of the buildings that we built.

Aaron Strauss: You should be. That's really, really great to hear. Last question for you. You're doing development, which is one of the most stressful jobs in the world. Delivering a great product, having fun while you're doing it, returning capital and making money for investors. You're a young guy, but this is just absolute blocking and tackling. Every day they're coming at you with problems.

I know you thrive on the adrenaline. You're the chief snow shoveler. You're constantly rolling up your sleeves, but there are days you have setbacks. The approvals don't go forward. Seller backs out of a contract. Something is missed. I mean, it's just inevitable. Development is just one problem after another problems coming at you.

So how do you develop the mindset, frankly? Somebody listening to this is interested in getting into development. Maybe they're trying to do their first project. I mean, you just get beaten up over and over and over and over again. You keep coming. You're so resilient to do what you need to do.

How do you talk to yourself mentally to stay the course throughout that first project when starting all the way through today? What gives you that mental framework to keep operating when things are not going your way? That mental health aspect I always try to throw into this conversation.

Jared Hutter: That's a good point, right? And I should be way more stressed than I actually am. If you look at my to-do list, if you look at the things that we've got going on, and truthfully, 2025 was a really tough year, right? We had some wins. We set ourselves up for some stuff moving forward. We sold a building at a good number. But there was a lot in there that we have struggled with over the last year.

I look at it and I look at my to-do list all the time, and I have these conversations with friends. If I sort of did a mental dump to some friends who are not in this business about what's going on, they would probably lose their minds, right?

They would probably say, "Oh my God, how do you sleep at night? How do you even deal with all this?" And I think it's just about having a good attitude, right?

Like it really is at the end of the day. I'll give credit to a partner of ours' wife who made this comment, and a guy in my office keeps reminding me of this. He's like, "They're all just money problems, right?"

Everything out there on this side can all be solved with dollars. Doesn't make it easy. Doesn't make it a good thing. But it's one of the best sayings I've heard recently because, look, I'm healthy. My kids are healthy. I have a good family. I got a great wife.

Day to day, there may be a lot of struggles, but when you take a step back and think about it, they're money problems. I don't want to minimize how important that may be, but it's only one part of the equation.

So when you put it under that lens, I think you can really take a lot of the stress out of it and say, "Okay, we can deal with this, right?" These are not life and death situations. Not even close.

Sometimes they may feel like it. You get setbacks on projects. An investor drops out. Buildings not operating the way you want it to be.

Absolutely, there are tons of stressful moments. But I think over the last seven, eight months of some of the challenges we've dealt with, a lot of them on our side, I've really done a phenomenal job of compartmentalizing it and saying that's the business side of it.

I am the business. I work 24/7, right? I'm home. I'm dealing with all this stuff.

I think the idea of a work-life balance is complete bull. To me, when you run a business, it's all together. I explain that to my kids. They see me working and try to explain it to them what I'm up to.

But again, nothing we're doing here is really life or death scenarios, right? So when you take it out from there and say, "You know what? My kids are healthy. My wife is great. I got good stuff going on," you just put it in perspective and be like, these are challenges, but we'll get through them and we'll figure it out.

I come into the office every single day. I really think I have the best attitude I can possibly have, right? I come in. People say, "How are you doing?" Great.

I get on calls with people trying to raise money, and you bring a positive attitude, and people don't know how to respond sometimes. "Is everything going well?" Of course not.

But I think if you just have that positive attitude all the time, it's a complete game-changer. I saw somebody acting like that about a year ago, and I just took that into my own ecosystem, and it's been the best thing I ever did.

Aaron Strauss: I love that. I'm going to try to adopt that.

Jared Hutter: Please do.

Aaron Strauss: I may not get anywhere near your level. Yeah, I may not get anywhere near that level.

Jared Hutter: But when you get a call with people, I'm telling you, I get on a call with people, don't know me, and they're like, "Oh, how are you doing today?" Great. They don't know how to respond, and it just changes the tenor of the conversation right from the get-go because you bring positive energy, and it's truly infectious.

Aaron Strauss: I totally, totally agree with that, Jared. One hundred percent, especially in a tough business like development, or any business for that matter.

Jared Hutter: I think it's any business. By the way, every business is tough, right? Development's not, to some people it may be tougher, but you tell me the value-add business, that's scary to me.

At least I know what's behind the walls of all the buildings I'm building. When I go buy a value-add building, you have no idea what's behind some of those walls.

So my business may look tough to a lot of others, but their business looks very tough to me. So I like the challenges that I have.

Aaron Strauss: Well, well said. Great perspective. You're a young guy with tremendous energy, tremendous potential. You've already actualized a ton. You're going to buy and develop a ton more.

It's going to be fun for people to watch it. I really appreciate you taking the time, Jared. It's going to be awesome to see what you continue to do.

I guess we'll wrap it here. So thanks again, my friend, for making time today. It's been really a lot of fun.

Jared Hutter: No, this is great. Thanks, Aaron.

Aaron Strauss: Thank you for joining the Dealmakers' Edge. Don't forget to follow us on your favorite podcast platform. Please give us a five-star rating so more people can follow the conversation.