Student Housing Gives College Students a Charmed Life
Much has changed in campus housing since I went to college. I went to a school with great dorm life. Not only did we have private bath rooms in our dorm rooms, but our rooms and bath rooms were vacuumed, dusted and cleaned and the trash emptied once a week by university cleaning staff. Contrast this to most of my friends who went to other schools that had communal bath rooms that never seemed to be cleaned, and whose rooms were cleaned only when their mothers’ came to visit (and then only by their moms!), I had a pretty good college living experience (thank you GWU). But today’s college students have options that we could never have dreamed of thanks to private developers and REITS entering the student housing market.
As college enrollment has increased over the last 15-20 years, many universities across the country have been unable to keep up with the demand for on-campus housing. As a result, students are often forced off campus as early as their sophomore year. Students want to be close to campus. Historically, the closer a rental unit is to campus, the more expensive it is. And, unfortunately, the more beat up it is. As builders and developers have acquired and assembled in-fill sites, new apartments have been built near campuses across the country. Many of these apartments are specifically designed to meet the needs of college students. To start, the apartments are leased “by the bed” as opposed to by the unit. Each bedroom has its own bathroom, a huge plus for everyone. The units are fully furnished and the buildings come with many amenities such as security (including key card access at every entry point, elevator and stairwell), resort style swimming pools, fitness centers, tanning rooms, computer centers, study/meeting rooms, activity planners, BBQ’s, pet parks, and volleyball courts. Many projects are mixed use and have retail, restaurant and other components that benefit residents and the community as a whole.
There are a number or REITS that own, manage, develop and construct student housing projects. The 3 largest are American Campus Communities (NYSE: ACC), Campus Crest Communities (NYSE: CCG) and EdR (NYSE: EdR). Over 110,000 new beds came on-line in 2014-2015, most of which were constructed by merchant builders. However, the REITS continue to look for opportunities and have the cash available to fund new projects. This could bode well for the small builder looking to sell a completed project.
There are numerous successful student housing projects in Florida. For example, University Park Boca Raton is a new project serving Florida Atlantic University. It has a 2-story clubhouse and student lounge, 24-hour fitness center and yoga studio, video gaming room, BBQ, pool and hammocks. University Club Townhomes in Tallahassee is near Florida State University. It consists of 4-bedroom/4-bath and 2-bedroom/2.5-bedroom townhomes. Its amenities include a fitness center, computer center, tanning salon, BBQs, billiards room, beach volleyball court, pool and sundeck, carwash station, card controlled entry and security guard. These sound much more like resort living than college dorms.
To be successful, student housing developments must have the amenities that will attract students, but, they must be close to campus. Students want to be able to walk or bike to campus. Developers often work with the universities to route the campus bus system to the complex. Even students who have cars are reluctant to drive to campus because parking is even scarcer on campus than housing. With walking, biking and bus as options to get to campus, together with a fully furnished luxury apartment with a private bedroom and bath, students will flock to a student housing project. Analysts say that rents are factored slightly lower than traditional apartments. However, vacancy rates will factor higher and consistent making the right project a great investment.