- May 07, 2013
For those who lived in traditional, institutional-style dorms with groups sharing bedrooms and bathrooms, today’s choices for student housing are astounding. Students today expect state-of-the-art features with private rooms, the latest in technology and resort-style amenities and services. That could mean everything from offering an infinity-edge pool to a rock-climbing wall to having 24/7 concierge services.
“It is a constant challenge for developers of student housing to keep up with the needs and demands of the most brand-conscious and technologically savvy segment of our population,” says Travis Roberts, president of Dallas, Texas-based Inland American Communities. “While the floor plans, price and apartment features are important, students are typically basing their housing decisions on which place has the cool factor and where their friends want to live.”
The student housing industry is growing significantly due to the increase in enrollment at many universities with an outdated, often limited supply of options for housing—both on- and off-campus. Specific factors influencing demand vary greatly from market to market. However, across the board, students are seeking environments designed for an optimal living environment that enhances their interest in making social connections.
With this in mind, American Communities’ University House brand has been built by focusing on the lifestyle and overall experience for the student, with an emphasis on a “plug-and-play” kind of environment with fully furnished units including full-sized kitchens, cable, utilities and wireless internet, all included in the rent.
Understanding the market is the key to the strategy of student housing developer Campus Apartments, based in Philadelphia, Pa.
“It’s all about market selection and siting your products from an acquisition or development standpoint with the particular demographic of that particular school,” says Dan Bernstein, chief investment officer and executive vice president at Campus Apartments. “We look at developing and acquiring the purpose-built student housing in and around campuses that have a long-term value proposition and fit a certain segment of the market, but we also look at the repositioning and redevelopment and professional management of Class C and D product as well. If you professionally manage it and reposition it with some capital dollars, there’s a lot of value to be created.”
By doing research up front and looking at the population that defines the school’s culture, a developer can make good investments regardless of the market it serves, as long as it adapts the building in a way that will meet expectations of that particular group.
“A well-maintained, safe and secure student housing [asset] that is well located and well priced can often win out over a massive amenity package,” Bernstein says. “Bed/bath parity is important in some markets; for others it’s social spaces and study spaces, but at the end of the day, it’s all filtered through the price point they are looking to pay and the proximity to campus.”
The Michaels Organization has created University Student Living LLC—a new business unit dedicated to excellence in student housing. University Student Living is looking for opportunities to develop, construct, manage and acquire student housing communities in areas adjacent to colleges and universities across the country and is also offering its management expertise to universities and other private-sector student housing owners. According to Joe Coyle, president of University Student Living, location is critical for new student developments. It wasn’t long ago when student housing was going up four miles or so from campuses because the land was cheap and available, but the company strategy has changed.
“You don’t want to be far away from the center of their lives, which is the campus,” he says. “Moving closer to campus is one of the biggest competitive advantages.”
While room size has stayed fairly consistent over the years, what has changed is the amount of space allotted for shared rooms.
“There is a lot more communal space in and around the properties now,” Coyle says. “Students want places to study together and places to play.”
High speed matters
The biggest challenge in student housing development is keeping up with the demand for Internet speed. Even with significant upgrades to the service, the usage among students tends to increase even faster than their expectations.
“Some say it’s more important than the kitchen sink, and we agree,” Bernstein says. “You really need to make sure there is a robust Internet offering. It’s moved from an amenity to a utility level.” Residents also want 24-hour access to management, with the majority of communication occurring online and through social media.
“Another unique aspect of student housing is the role of the parents, who tend to be extremely involved,” Roberts says. “The majority of our leases are co-signed by a parent who also pay the rent, resulting in the challenge of appealing to two different customers with virtually opposite objectives and concerns. Parents tend to ask about safety and studying, while students are curious about the pool parties and atmosphere of the community.”
Therefore, developments need to be designed to appeal to both—from the features of the building to the customer service training of the staff.
Developers are designing and building student housing to withstand the higher density and frequent turnover of new residents each year by incorporating high-quality materials, furnishings and finishes that are maintenance-friendly and durable. According to Roberts, energy efficient materials and appliances are key to minimizing utility costs, which is an important factor in remaining competitive during leasing season.
Going green has become a big focus of University Student Living as the company realizes its growing importance among college students. “We are looking at getting off the grid and looking seriously at products that may generate their own electricity,” Coyle says. “Sustainability is on the mind of a lot of kids, and we want to do as much as we can to be more energy-efficient so we won’t be burning as much carbon.”
Latest and greatest
There’s no cookie-cutter design of the perfect student housing project, but one thing that all developers can agree on is that it has to offer residents something that gives it the “wow” factor and provides great value.
For example, at the soon-to-be-opened University House Fullerton one block from Cal State Fullerton, the poolside clubroom features a high-tech video game lounge, billiards, flat-screen TVs and interactive study center with Mac & PC stations. There are separate fitness areas for cardio and weight training, plus multiple courtyards, an H2o [brand] tanning deck and an advanced controlled-access entry system installed throughout the property.
Understanding the need to be close, a soon-to-be-opened University Student Living property near Baylor University in Waco, Texas will allow students to “kick off their bunny slippers and walk to class,” Coyle says. The development offers oversized study rooms, a pool, club area and rooftop overlooking the campus.
Capitalizing on a student housing trend to create a live-learn environment, Campus Apartments has partnered with Howard University to develop two on-campus residential facilities that will include two-person semi-suites designed to serve the university’s underclassmen population, as well as classrooms, a 200-person multipurpose room, academic advisory offices, and a new home for the University’s Office of Residence Life. It’s scheduled to open in summer of 2014.