It’s still unknown whether students will continue paying for beds leased through July, despite not returning to campus after spring break.
“There’s just a whole ton of unknowns, with a fairly compressed time frame before the 2021 school year begins, so we are very concerned that some new buildings might not be ready, and the ownership is going to have to lose a whole year of revenue, which, in many cases could be absolutely devastating,” said Dave Borsos, a student housing co-leader with the National Multifamily Housing Council.
Whether or not schools decide to open in the fall, and when they will communicate their decisions, not only impacts lease-up for the 2020-2021 school year but also new construction.
While the actual numbers are shifting, 35,000 new units rented by the bed were anticipated to come online by fall 2020, as well as 4,700 units that rented by the unit. Now all of those projects are in limbo, says Moody’s Analytics chief economist Victor Calanog.
One thing that the coronavirus has driven home for student housing operators is the importance of powerful Wi-Fi.
As universities scrambled to scale back operations and send as many students home as possible, higher education classes shifted almost seamlessly online, thanks to video conferencing apps like Zoom and Slack, and project management apps like Trello. And many students chose to attend those classes in their off-campus apartments.
In March, Borsos and NMHC student housing co-lead Matthew Berger began holding weekly calls with COOs of their member companies. “We’re hearing a lot from our owners who are reaching out to their students,” said Borsos. “A number of them are interested in coming back simply because it’s an environment that’s easier for them even if they are studying online.”
Strong Wi-Fi is now considered a utility by American Campus Communities, the largest student housing owner, with almost 140,000 beds. Chief Marketing Officer Jason Wills says the REIT recently looked at new technology options including virtual reality, esports and robotic vending options, but remains focused on “functional options vs. over-the-top amenities that would soon become obsolete.”
Sector Insights rotates among market rate/luxury housing, workforce housing, low-income housing, student housing, senior housing and mixed-use.