DALLAS—In preparation for the upcoming RealShare Student Housing conference in Las Vegas on June 4th-5th, Greg Faulkner, locally based president of Humphreys & Partners Architects LP, talked about a few key trends his firm is seeing in the student housing space.
As moderator of the RealShare design, development and construction trends panel, he tells GlobeSt.com that one thing he has seen a lot of lately are what he deems “amenities on steroids.”
According to Faulkner, “these are resorts versus housing,” fully equipped with rooftop bars, seating, pools with lazy rivers, cyber cafes and social areas, concierge services, poolside yogurt service and more. “There are not apartments or dorms, think Hyatt Regency.”
He explains that market rate developers really need to look at what student housing has become the last 10 years because these are their next renters.
He also GlobeSt.com that 75% of what his firm has been doing for the last five years on off campus student housing is four-to-five-story wood frame, generally with five or six story about grade parking garage. On small sites, he says, “we may have to do four-story with two levels of underground parking—double costs of above grade precast garage. “These are 200-beds plus per acre typically, three acres, 600 beds—sometimes 700 beds depending on unit mix and total square foot average.
Things are changing, Faulkner explains. “We have five high-rise student deals we are working on now…one under construction in Ann Arbor, where rents may be $1200 per bed there.” High rise costs that are $200 a foot plus will work with those types of rents, he says. “Typically it ranges $600 to $800 in a lot of markets so we need to stay in wood frame for to lower hard costs to where things work on yield–$130 to $150 a foot generally, but varies widely depending on locale. We also have a few steel frame seven-story buildings now that get more density but stay below high-rise code….steel costs and lumber have never had this small a gap on pricing in 20 years.”
One issue everywhere is hard costs. “There is a big labor shortage on framers and skilled labor almost everywhere … prices up another 15% to 20% since last Fall.”
When asked about other kinds of projects, he notes that there are very few cottage projects and garden-style projects.
“Student housing has been recession resilient,” he tells GlobeSt.com. “And institutions want to own and lenders want to finance.”
He notes that “we still have 3 million high school graduates for the next few years versus 2 million, and 70% go to college—huge demographic push until 2017 or 2018 when it peaks. It’s still 35% of our work—we did 20,000 market rate units last year and 7000 student beds—so projects are getting done, financed and built … but nothing is easy.”