Student Housing Trends: Value of Mixed-Use Assets Grows

David Adelman, CEO, Campus Apartments. Image courtesy of Campus Apartments

In a time when enrollment continues to rise, investors’ attention remains directed at student housing assets, which offer an opportunity to obtain consistent returns and low vacancy rates. The way a property performs depends—most of the time—on location, but there are other aspects to take into consideration.

National student housing provider Campus Apartments is known for its value-add investment strategy. David Adelman has been the company’s CEO for more than 25 years, leading its expansion in markets across the country. In an interview with Multi-Housing News, Adelman discussed the firm’s investment and development plans for the years ahead, as well as his expectations for 2020.

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According to Yardi Matrix data, Campus Apartments owns 25 properties in metros such as Atlanta, Denver, Austin, Tucson and Tallahassee. What attracts you to the West Coast markets?

Adelman: At Campus Apartments, our strategy is market-specific, and we consider everything from supply, demand and demographics when identifying properties.

With 2019 almost over, what are the student housing investment trends that we will be seeing in 2020?

Adelman: The student housing market is dependent on the institutions they serve and how successful they are in attracting students. Established groups take a thoughtful approach to analyzing the supply and demand of a market and use that data to drive decision making as it relates to investments. This strategic approach has attracted new international entrants from the investor front, which reaffirms the value that student housing brings to the asset class.

What type of student housing amenities are proving to be most in demand? What are your expectations when it comes to popular amenities going forward?

Adelman: Currently, student housing trends emphasize the value of mixed-use properties. While this trend has been relevant for the past few years, we are seeing an uptick in lifestyle amenities including fitness centers, common areas, study and conference rooms and, of course, Wi-Fi and smart technologies. Connectivity and collaboration are the two main focal points of student housing development.

What are Campus Apartments’ investment and development plans for the upcoming years?

Adelman: There are a few focus points for Campus Apartments looking into 2020 and beyond. Internally, we continue to invest in our people and emphasize our culture and training, something that’s been a hallmark of Campus Apartments for more than 60 years. Externally, we are evaluating new markets where it makes sense and looking to expand and develop current markets. We have found that measured growth leads to success and look to continue that method moving forward.

Our focus is on value-add real estate. We are investing in the revitalization and repositioning of properties in current markets and new markets rather than growing markets with new developments. In addition to the physical re-imagination of a property, we are also homing in on management enhancements that can elevate the property.

What are your expectations for the student housing market in the year ahead?

Adelman: In terms of the industry, 2019 was a year of responsible development. Meaning it was a year of seeing responsible growth in markets versus overgrowth. This is a welcomed balance in the industry and one that I am pleased to see. I expect this level of control to continue in 2020.