For years, college students needing housing on or near school grounds would have to settle for a dorm, which often meant sharing a bedroom and bath in small, outdated spaces. One could hardly say these undergrads were getting enough bang for their buck.
But student housing has experienced a sea of change in recent years, with more and more developers entering the market and providing an array of stunning offerings to try to set their product apart.
“Following the last recession, student housing [went] from a very small, unique subset of multifamily real estate to a much more broadly accepted sector,” says Bob Clark, president of Atlanta-based student housing management firm Peak Campus. “There's now a great deal of institutional interest in the space, and every day there seems to be new capital chasing deals."
And today, students, parents, and investors can get a lot more for their money as developers provide trendy, comfortable, and, in many cases, downright indulgent suite-style apartments that are changing the game in student housing.
Below we explore three key factors developers are employing to make their student housing offerings a success:
Not surprisingly, student renters want to be close to campus. Many lack vehicles and therefore want housing that's within walking distance of campus, or at least close to campus bus routes.
In response, many developers are willing to pay more for a site that's as near to the campus as possible, to in turn make their developments as attractive to prospective student residents as possible.
"Location and price are what students look for overall," says Miles Orth, COO of Philadelphia-based developer–operator Campus Apartments. "Generally, students are looking for proximity to campus, amenities, and easy access to transportation."
2. Academic Centers
Student housing needs more than just game rooms, pools, and standard lounges to attract future renters and keep current ones around. Now, developers realize that academics-based amenities, such as high-speed Internet connections and study rooms, are essential for student renters.
Indeed, dependable Internet service can be a deal breaker for student renters, who need fast service daily to do their course work, as well as meet their entertainment needs, such as online movie or music streaming.
Study rooms, too, are a desired asset at student housing properties. Aware of the competitive job market they’ll face after graduation, students are putting their academic success first. To meet their standards, developers are equipping their properties' study rooms with not only computers, and conference tables, but state-of-the-art smart boards and quiet areas for focused work, as well.
“There's really been a [return to] academic centers,” says William Talbot, investment officer and executive vice president at developer–operator American Campus Communities, based in Austin, Texas. “So, in a lot of the design for amenity spaces, that’s what we’ve been focusing on the past couple of years.”
Although living rooms and kitchens are still shared spaces in student apartments, most units now have private bedrooms and bathrooms, which give renters the personal space they lacked, and so desired, in dorms. Accordingly, most developers are moving away from units that don’t provide these private spaces, knowing that students will pay a premium for them.
Some student housing properties offer one-bedroom apartments for students who are willing and able to pay the higher price. Of course, many developers still provide suites with up to four bedrooms and four baths, and in some cases shared bedroom units. Still, even in shared accommodations, there is visual privacy, with individual closets, and private bathroom and sink areas. This allows students to get the best property for an affordable price.
"Students obviously like privacy; they like the private bedroom and private bath, and good communal areas,” says ACC's Talbot. "We've started to develop—selectively—a specifically designed shared-bedroom unit that still offers privacy at an even lower price point than smaller [but] more private units."