For essentially recession-proof markets like military housing, it's easy to stick to the same formula and keep assets in one group. So when East Greenwich, R.I.–based Corvias Group entered the student housing business last year, launching its Campus Living division, the firm was doing more than just hedging its bets.

“The military housing business is a tremendous hedge against economic swings,” says John Picerne, CEO of Corvias Group. “So that’s one of the reasons we ended up going into that business to start with. Student housing is similarly a hedge against economic shifts, but, more importantly, it’s an area of great need currently.”

With many colleges across the country facing financial constraints and having to compete for students, getting into the student housing market was simply a sound decision for Corvias. 

“Providing a value education has to go hand in hand with providing valuable living arrangements,” Picerne says. 

Corvias' primary asset classification had been military housing for the past 12 years, with the company owning and operating about 25,000 military homes on military installations across the country. The firm's search for portfolio expansion began two years ago, when it looked at a host of different business lines and opportunities, playing off its experience and partnerships within the military market. Corvias' main goal was to enhance the value of the property for an owner, avoiding typically financed complexes and instead seeking institutional-type partners.

After scouring through different types of programs, Corvias realized that student housing was a safe, prosperous asset class.

“It’s a very large market, and, probably most importantly, had a tremendous amount of need,” Picerne says.

For Corvias, student housing beat out public housing, an area the operator had looked into, despite the fact the market is being privatized in different forms in the country, Picerne adds. 

Affordable housing inspired Marlton, N.J.–based Michaels Co. to branch into student housing this year, as well—albeit for a different reason.

“Our bread and butter for 40 years, now, has been affordable housing, financing, mixed-income housing,” says Ava Goldman, president of Michaels Development. But with the federal government budget retrenchment and concerns about the future of affordable housing, Michaels felt it needed to diversify its portfolio so that the firm could continue with its primary mission. 

“We’re still very committed to it, but we have to fit related ways to meet our primary mission, which is to build communities,” Goldman says.

Michaels does that by developing its overall business strategies so that the company is less reliant on HUD and its subsidies, reaching out to other forms of housing and communities that, too, are less dependent on government support.

After dabbling in the military housing division for several years, a natural progression was there to bring executives on with experience in student housing to create a new division for Michaels Development.

“Here was another opportunity to reach out to a community that had the same need as affordable housing,” Goldman says.

And Michaels' separate student housing division, known as University Student Living, works: With three or four deals last year and 15 to 20 in the pipeline this year, Michaels Cos. is ensuring a product for students that is also affordable.

The transition to student housing is far from easy, of course: The terms of deals and the sources of funding are starkly different. In fact, they’re sort of like different worlds, Goldman says. But both Corvias and Michaels bridge the gap by bringing into the fold employees who have expertise in student housing.

A little knowledge goes a long way.