Charlotte, N.C.—Campus Crest Communities, a Charlotte, N.C.-based student housing developer, recently opened six properties across the country. MHN talks to Ted Rollins, CEO of Campus Crest Communities, about why the student housing industry is currently booming, and why, in his properties, amenities take a backseat to promoting socialization among residents.
MHN: What is the state of student housing?
Rollins: It is doing well, and there are a lot of things driving that. If you look at it, it really is not only the children of the baby boomers—which is kind of tailing off a little bit now—but you’ve got longer average stays in college because a lot of people are going for five years instead of four, and there’s even some six-year people there for an undergraduate degree. You’ve got a higher percentage of students in high school graduating, and of those graduating high school there is a higher percentage of those attending full-time college. In addition to that, you have a meaningful amount of foreign enrollment. The reason for that is many of these state schools can take foreign enrollment out, counting it out of their state enrollment guidelines. If I’m a state school, I have to balance my in-state and out-of-state attendance, and foreign enrollment doesn’t count against that.
On the other side of the coin, a lot of the housing stock on campus was built during the original baby boom, so a lot of it needs to be replaced or renovated. At the same time, this is probably one of the tightest times for state higher ed. budgets in recent times. If you look at it, 37 state higher ed. budgets have had a net decrease year-over-year, so budgets are tighter. People who are running the schools are starting to look at different ways that they can manage their capital allocations. What we’re seeing is that schools are being more careful with their capital, more thoughtful about what they use their bond allocations for, and they’re seeking private solutions to things like housing, which is not always counted as a core asset.
MHN: That’s somewhat surprising.
Rollins: Well, if you’re in the school business, the first focus is tuition. So if I’m the president of a school, I’m looking at classrooms, labs, libraries—something that supports my academic side—so other things start to become non-core assets, and they look for alternate funding. Of course the public companies in this space can offer capital, and we can all offer a private solution for the school, so we’re seeing a lot more interest there. I can tell you personally, my experience is that we’ve seen a lot of activity with schools reaching out to us to discuss alternatives.
MHN: So now it’s the schools approaching you instead of you approaching the schools?
Rollins: I would say so. We’ve looked at it, and we’ve never done anything like where you answer a request and get into a bid situation. We have more of a tailored approach to that. We’ve seen more interest and we’re included in more stuff. There’s a lot of activity in this space. Keep in mind, they also want to stay competitive. You don’t want to put your students in an old dorm if your competitor is putting them in a nicer, newer, renovated housing product.
MHN: Along that line, what are some of the trends in student housing now in terms of amenities?
Rollins: We have a nice appointed product with the interiors—private bath, private closet, all that. We have very fast wifi that’s fully bundled. Our apartments are fully furnished and have a washer/dryer. There’s an amenity package that ranges on the market, but for all of ours we have areas within our communities that have places for gathering. We have outdoor sporting areas, pool and recreation areas that weave through the community. We easily have the largest clubhouse out there, and it’s designed to run concurrent programs on a social level. There’s a lot of focus on the resident’s life, at least in our company. Specifically, we have developed a program called SCORES—social, cultural, outreach, recreational, educational and spiritual—and we run ongoing programs every week. Our whole focus is not about the sticks and bricks—it’s about what you do when you get there. And the sticks and bricks and the amenities and the different areas to gather really support our program, which is our cultural outreach program. What you’re coming to us for is the live/learn experience that compliments your academic experience. So when you’re coming to us, yeah, you have a nice place to live, yes, there are a lot of things to do. We’ve got great things in our clubhouse—everything from a coffee house to what we call the “tavern,” where they can play games. All this is to create a radically different lifestyle. Our focus is really on being the live/learn environment. We’re really focusing on what goes on within the walls of our environment, more so than the amenities.
MHN: That’s so important, because school is obviously important, but a big part of going off to college is the social aspect and learning how to interact with various people.
Rollins: It’s critical for us, and that’s our main thing. To take that a step further, we have a very big focus in our company what we call People, Planet, Prosperity. If you come to our product and you live with us, you’re building your friends, you have your social infrastructure, you’re involved in our outreach, you’re involved in our cultural activities, you’re getting educated on anything from balancing your checkbook to how to date on a dime. You’re getting life skills. You’re living, you’re learning and you’re having your social experience. Our whole thing is “make your mark.” These are your college days, these are your glory days. To me, as a company, we’re successful when a kid puts down their handheld and stops texting and gets involved in the community. It’s not only a focus on, having a good time, it’s a focus on being a good global citizen. Not only are you experiencing your social component, you’re also doing something for the greater good. Yeah, we’re a real estate investment trust. Yes, we make good returns and we’re growing. And that’s great, that’s the economic part. But we’re taking these kids and we’re energizing them to be better citizens, to be responsible, to socialize and to build their lives.
When you think about college, do you think about that formula you learned in math class, or do you think of your life experience of college? When they look back, we want them to say that they learned this and that, I’ve made some really good friends and I did some really good things for my community.