Student Housing Management Strategies: Q&A With Caliber Living
- Dec 02, 2020
Rick Jones has more than 30 years of experience in the property management sector. Throughout his career, he operated in markets across the U.S. from coast-to-coast and managed various portfolios that have focused on student, senior, conventional and affordable sectors. As president of Caliber Living since 2016, he is responsible for the strategic vision and operation of the company. In this interview with Multi-Housing News, Jones talks about how the pandemic has impacted his student housing business overall and the effect on the company’s deal with Peak Campus.
At the end of last year, Peak Campus acquired Caliber Living. Tell us more about this change.
Jones: At the time, we looked at it as a strategic move that would allow us the opportunity to focus on growing our development and acquisition platforms. We also thought that it could be better for our team members if they were part of a larger operation with more training and advancement opportunities. We had great respect for Peak Campus and their achievements in the student housing sector, and being fellow Atlantans helped us become more familiar with them. Obviously, much has changed in the past year from when the deal was struck, and we were able to unwind the deal because we were unfortunately disappointed with the initial results and needed greater flexibility and responsiveness in uncertain times. Caliber remains an independent organization and is not affiliated with Peak in any manner.
How has your property management strategy changed since the onset of the pandemic?
Jones: I think every company says their people are their most important asset. This pandemic gives us the opportunity to prove it. Our property management operations have had to remain fluid to local conditions. We implemented standards throughout the organization on how to keep our teams and residents safe, but we’ve stayed connected locally to the ebbs and flows of the disease to know how to react. We implemented the normal cleaning and distancing protocols.
We engaged more technology to stay connected. We’ve invested more in digital advertising to expand our outreach, and we’ve tried to balance the human element in all this. There still is no substitute for personal site visits. Fortunately, we’re within driving distance of all our assets and I’ve been active along with our leadership team in being on-site to ensure we’re doing what we should be doing. We owe that to our great teams and we owe that to our loyal investors. Overriding, though, is the concern that we are all safe. If we can’t do this safely, then we regroup, because our paramount concern is the well-being of everyone in our organization.
How are you coping with the challenges the pandemic brought?
Jones: The nature of our company is to embrace change, but this has been seismic. We are coping with lower occupancies and being more flexible in our lease offerings. Unfortunately, though, the pandemic is but one of several obstacles this year has brought. Through each, we’re having to learn and adapt, and repeat. We’ll come out of this stronger. I’m so proud, though, of how our teams have coped with all this—they’ve been amazing.
Student housing specialists who attended the NHMC/InterFace conference this year agreed that the effects of the pandemic on the industry differ from one market to another. How has the coronavirus-induced crisis impacted the markets you operate in?
Jones: Every market has been impacted and some more than others. In April, we had no idea where this was headed and how the schools and students would react. While occupancies are not as high as we want them, our worst-case scenarios did not play out. We probably fared better than most because our properties are mostly in the Southeast, but we can’t say that tertiary markets were more impacted than flagship markets—it was really school by school. As we look forward to the spring semester, we expect a continuation of what each school was doing from the fall.
Despite the second wave of COVID-19 cases and classes being held either online, in person or a mix between the two, students want the campus experience, rather than studying from home. What can you tell us about occupancy at the communities you manage?
Jones: As in every market and in every portfolio, there are some winners and losers—so this year is for us. Generally, occupancies are not at pro forma and we’re disappointed that our investments are not at the level we projected. On the other hand, our student housing portfolio has not been disrupted like some of our hotel or retail holdings, and for that we’re grateful. We look forward to bouncing back in 2021.
Please share some details about how the leasing process for the 2020-2021 school year went at your properties, considering enrollment this year was down by 3 percent, according to CBRE.
Jones: Prior to the pandemic, we split our marketing between digital sources and networking in person at events, etc. When we were locked down, we had to quickly pivot to an all-digital platform. Our social media became critical, but it was difficult to curate content locally that was effective. We worked all the live video platforms for whatever worked for prospective renters to give live tours. We tried multiple methods to keep residents engaged socially and also dropped desserts or other fun things at their door. We probably did too much Instagram bingo, but we were trying different things to see what worked. At the end of the day, the properties that had great leasing velocity heading into the pandemic were the ones that emerged in good shape, which is the case every year.
Do you expect this temporary pandemic to have a permanent impact on the student housing industry?
Jones: There will be some long-term implications from the pandemic. I think that the implementation of technology to better collaborate is not going away because it’s more efficient. The longer this plays out, the more people are going to be uncomfortable in large groups, and therefore, larger spaces that enable better distancing will be the norm. For instance, we have isolated study pods in our new developments that allow students to be in the clubhouse with people, but they feel safer being in the pod. It’s what we call “together alone.” Fitness areas will change because of the desire to workout remotely.
Equipment will need to be spaced further apart in the fitness areas but ideally, residents will want the convenience of the Peloton-type bikes or fitness mirrors in their apartment and owners will provide them as an add-on amenity. I can imagine that elevators are going to be difficult for people to share which may make high-rise buildings less desirable. Sanitation, I hope, stays important for people and is something that is recognizably different. I think the leasing process is forever changed. Most operators have parts of the process figured out with digital leases, CRM, etc., but self-directed tours of the property are now essential. It’s a must for each property to have their own Influencers on-staff and be able to curate their own content for their website and various social media platforms.