DALLAS–Fountain Residential Partners has nine student residence projects underway throughout the US. As GlobeSt.com reported, the locally-based company recently broke ground on the 465-bed Campus Vue near the University of Houston, as well as Stadium View for Montana State University students. Fountain President, Brent Little exclusively talked with GlobeSt.com about the company, its project pipeline and how the student housing market has changed over the years.
GlobeSt.com: How do you go about picking a campus to build near?
Little: The primary issue is demand. Demand can come in many different forms. The most simplistic is enrollment growth. Harder to define are schools that have not seen significant growth, but have outdated on campus or off campus housing.
There can also be demand for a different type of product than is current represented in that marketplace. For example, there may be an overabundance of four bedroom units, but the market is lacking in one and two bedroom product. There may be traditional “flat” apartments, but no townhomes or cottages. There may be development one to two miles from campus, but no walk-to-campus communities.
The other largest factor we look for are barriers to entry. Once again, barriers can come in many forms – difficulty in obtaining entitlements from jurisdictional authorities, physical barriers to development, economic barriers in the form of high construction costs not justified by rental rates, economic barriers due to blighted areas surrounding urban universities, and lack of developable land parcels.
GlobeSt.com: You currently have nine projects underway. Are there more in the pipeline? Where are you looking?
Little: Our business plan continues to be to construct the best two to four walk-to-campus developments opportunities we review every year. We are constantly reviewing information and sites in 200 to 300 student markets across the US. We are fortunate that our structure allows us to be flexible and do both large and small scale projects anywhere in the country with flexible venture structures.
GlobeSt.com: Your projects seem to offer more amenities and features that the typical college residence – is this what students today are looking for?
Little: The focus in the industry has been on increasing the scope, scale, and quality of amenities. I view this as catching up to product that conventional and luxury apartment developers have been building for years, then tweaking that recipe for our younger clientele.
What really appeals to the student is a high quality living environment that is professionally managed at a walk to campus location that is truly a home to them. That is the challenge – to create that sense of community and belonging with the built environment, the staff and programming for the community, and helping these young people find a sense of place at a very challenging time in their lives.
GlobeSt.com: What are some of the student housing trends you are watching for 2014?
Little: Technology is always changing, our residents are the early adopters, and every market is different. Keeping your bandwidth at the necessary levels and matching your offerings with consumer demand is always challenging.
GlobeSt.com: How has student housing changed since the team members connected in 2000? (Fountain has been in existence four years.)
Little: I always say that there is nothing that a student has in their possession that is 6 years old that they still view as usable. Our housing is the same – the challenge is to create a development that is not obsolete in 5-10 years and has a long shelf life for long term investors.
The biggest changes have been the increase in amenities and the move to walk to campus locations. The industry has learned that these sites hold their value and the “beachfront property” will always hold its value and be desirable for years to come.
GlobeSt.com: Feel free to add any other comments you’d like to share.
Little: It will be interesting to see how many beds are actually developed in the next few years. There have been innumerable groups enter the student market in the last 2 years, but they have not seemed to appreciably increase the amount of product coming to market. There are some metrics that seem to show we may have fewer beds delivered next year than this year.
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