As COVID-19 numbers continue to spike around the nation, student housing operators are still moving forward in anticipation of universities and colleges reopening for in-person classes this fall.
“We are paying close attention to what is happening from a science perspective. We are carefully watching disease rates, hospitalizations, and case rates as the best indicator of what are the likely outcomes in various states,” says Ari Rosenblum, co-founder and CEO of Vie Management, a provider of student and young professional housing with 10,000 beds in 11 states.
Rosenblum says the colleges and universities where Vie Management is located, such as the University of Alabama, Texas State University, and Penn State, have indicated they will open for in-person classes, starting earlier than normal and closing campuses prior to Thanksgiving to get ahead of a second wave, which many are predicting.
“For our part, we are prepared for students to come back earlier than they otherwise might,” Rosenblum says. “We can’t gamble on that, and we have to act as if the colleges are all going to open.”
He says the management teams are getting units for occupancy, supplies have been ordered, and contracts have been signed for cleaning the turned over units. Employees are required to wear masks throughout the communities every day, and plexiglass guards have been installed at the front desks. For amenities and common areas that are now subject to a certain number of people, it has developed in-house technology so residents can make reservations.
The firm also is using technology for automated self-tours, with an app called ForShow that employs GPS and beacons to guide a prospective renter around the property, allowing them to tour and lease on their own, a product Vie helped create prior to COVID-19.
“Our renters tend to be Gen Z and prefer less interaction with other human beings for touring,” says Rosenblum. “We are very focused on what the new normal will look like, and we are living it right now. Someone can find one of our communities on our website, look at the 3D rendering of a unit online, arrive to the property, and use ForShow to take an automated GPS-guided self-tour, and sign a lease without ever interacting with anyone.”
CA Student Living, which owns and operates over 17,000 beds across 35 markets, also is preparing for the upcoming academic school year at its existing communities as well as new construction projects that will open later this summer.
“We’ve got the best and brightest minds in the university settings. They are hard at work to bring people back safely,” says CA Student Living president Michael Hales.
COVID-19 has shifted the way the company thinks about its communities and students’ experiences. CA Student Living is reconfiguring indoor and outdoor common areas to promote social distancing and will maintain its cleaning protocols throughout the fall. The firm also was an early adopter of proptech tools, which it plans to utilize to manage capacity and facilitate reservations for certain amenity spaces.
“A lot of things are going into play so that the buildings will be safe for residents as they come back. We continue to see demand for students to be on campus,” says Hales, adding that 75% of units had been preleased by early June for the upcoming academic school year, just 2% down from the same time last year.
He adds that CA Student Living aims to have its buildings be within a half mile from campus, so residents can walk and not take public transportation or ride-shares. If classes do go online, the buildings are equipped with computer and printing labs, and the Wi-Fi bandwidth has been expanded. “Our buildings are equipped for them to do their work and still be as productive as anywhere else and get the benefit of being close to school.”
With 4,000 new beds across seven markets on track to deliver for the start of the school year without delays, including properties near Auburn University, Penn State, and North Carolina State, CA Student Living also had to navigate COVID-19-related construction issues.
“It’s critically important to hit the opening date for student housing,” Hales says. “Part of our strategy is to build a buffer of time into each delivery. Our goal is to deliver properties by the end of June and mid-July. If you have the timeline built in, you have the ability to weather the unknowns and still open on time.”
Both Rosenblum and Hales, whose firms operate in larger university towns, have confidence in the demand drivers in their markets but do have concerns about the COVID-19 impact on higher education.
“If you can look at this objectively, you can see the experience [of online learning] for many students has been subpar,” Rosenblum says. “Students have been less than satisfied. The obvious question is ‘why am I paying this much money to go to college on a laptop.’ ”
He says COVID-19 has taken trends and accelerated them. “This is going to be the death for the secondary and tertiary universities in small MSAs. People won’t spend money virtual learning at smaller colleges. It was a trend that was already happening, and this has supercharged it. Those colleges are in trouble.”
However, Rosenblum says that ultimately college is about learning, but it’s also a cultural experience for young adults who are out on their own for the first time, and he doesn’t believe that will go away.
“I’m not of the mindset that college and university as we know it is going away. I’m also not going to tell you there’s no effect,” he says. “The new normal is likely a hybrid solution of online and in-person, with the big getting bigger. Major institutions already have the network effect, they have the brand recognition, and they have the endowments to survive.”
Hales adds that when you have a recession or an event like COVID-19, the landscape is likely to change. “That’s what we’re watching the most,” says Hales. “For us, those are not typically the universities where we have properties, but we’re still interested to see how it plays out over time.”
He says CA Student Living still believes in the underlying fundamentals of the asset class. “It will take strong operations to succeed going forward.”
