New Faces Offer Interesting Student Housing Perspectives
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IRVING, TX-One of the highlights of this year's May 15 RealShare Student Housing conference was commentary from different sources. Specifically, "New on the Block: Student Housing's Freshest Faces" panelists presented viewpoints from new developers of and investors in student housing, while "Are You Smarter than the Student Housing Professional" offered insights from student housing end users: The students themselves.
"Student Housing's Freshest Faces" presented relative newcomers to the student housing sector. All agreed that the sector is attractive because of potential returns and that working in student housing requires more patience and preparation than working with multifamily properties. Nor did the panelists dive into student housing development and ownership without adequate preparation.
"We didn't necessarily wake up one day and say we want 5,000 beds," said Rick Perdue, director of acquisitions and development with Tonti Properties. "This was a long-term process."
Perdue and panelist Billy Ruvelson, principal with the Icon Co., also pointed out the differences between developing and owning student housing and multifamily properties. For one thing, timely delivery of student housing essential, Ruvelson explained. "It's all about on-time delivery," he added. "It's like being late to a cruise – if you miss it, forget it."
Also present on the panel was CW Capital LLC associate Matthew Wallach, who pointed out that those interesting in working within the student housing sector should have more than one lender on the roster – debt diversification is effective in this field. Wallach also offered the tidbit that, when it comes to equity sources, "they don't see much difference between student housing or multifamily properties."
Speaking of financial information, the panelists noted that priorities are different when it comes to resource allocation. In multifamily properties, financial and other resources are, more often than not, poured into the units. Not so with student housing, Perdue said, where amenities such as swimming pools, fitness clubs, study lounges and bathrooms are important. Adding to the complexity of resource diversification, student wants can differ from campus to campus, Perdue added.
The college student panelists participating in the "Are You Smarter than the Student Housing Professional" would have agreed with Perdue about different campuses and different requirements. The panel, moderated by Greystar's senior regional property manager Jennifer Roden, introduced student perception on topics ranging from parent input on leasing decision (in most cases, parents DO have a definite impact in this area); to green initiatives (the students like them, but don't want to have to pay extra for them); to signing leases online (the students prefer a one-on-one relationship when it comes to signing that first-time lease and don't particularly care for the door-to-door leasing renewal method).
One interesting topic was that of a property's proximity to campus. Conventional wisdom says that student housing properties need to be very close to campus to be effective (or at least, need to be close to a bus or shuttle line). Moderator Roden pointed out that, in a survey among students, 52% of those polled said, perhaps predictably, that they would be okay living in a B property with few amenities, so long as it was on campus. But she acknowledged that what astonished her was that 47% of those polled said they wouldn't have a problem living on a class A property with plenty of amenities, even if that property was two or three miles away from campus.
The student panelists' responses to proximity varied as well. Kayla Butler, a student at UCLA, was emphatic that her housing needed to be adjacent to, if not right on, campus. "One mile from campus is pushing it," said Butler, who explained that, during her sophomore year, she lived two miles off campus. Because driving in Westwood (the home of UCLA) is almost impossible, "that was a nightmare," Butler said. "I swore I'd never do that again."
Krista Graff, who attends the University of Minnesota, agreed that her housing needed to be adjacent to campus, if not on campus itself. Though Duluth, MN doesn't have the same traffic issues as does Westwood, CA, weather is a huge factor. "Waiting for a bus in the winter isn't much fun," Graff pointed out.
On the opposite side of the discussion were Brendon Vickery, who attends University of Texas in Austin and Andrew Bates, a student at Denton, TX-based University of North Texas. Both indicated that shuttles were okay, but also pointed out that the housing needed to be fairly close to campus; no more than a 10-minute drive or shuttle ride. And all the students agreed they'd rather have their housing closer to campus than closer to entertainment or bars.
The students' comments underscored something Perdue mentioned during his session. "Things differ from campus to campus," he noted.
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