LAS VEGAS—“Some of the millions of students heading back to college—and their parents—are finding a pleasant surprise: Landlords nationwide are cutting rents because of an oversupply of student housing in college towns.” That was the intro paragraph in a Wall Street Journal published less than a year ago—an article that got panelists at RealShare Student Housing’s Town Hall Power Panel talking. According to panelists, that perspective couldn’t be more incorrect and doesn’t have factual evidence to back it up.
Donna Preiss, founder and CEO of the Preiss Co., pointed out that the pool of folks that you have that are going to be collage age is increasing. “So you have a larger pool, an increase in international students…and last year alone, there was a 26% increase in Chinese students coming in as freshman.”
In addition, Preiss said, “Minorities are enrolling in college at higher and higher percentages, as well as females, and more students are also coming in full time.”
Are there markets where there is oversupply? “Clearly there area,” said William Talbot, EVP of acquisitions at American Campus Communities, however he noted that “if you take the top 10 markets that have the most supply, we are averaging 2.1% rental rate growth.”
Jim Arbury, VP for student sousing at NMHC, doesn’t mind some of the negative student housing publicity because “if it helps keep some of the dumb money out of the sector and scares some people away, then it is fine.”
Switching gears a bit, moderator Peter Katz, executive director of IPA, asked panelists about changes in the sector over the past five years. Ted Rollins, CEO of Campus Crest, says that there has been a change in what students want. The basics like location and internet connection are most important, not things granite countertops, he said. “Internet bandwidth is right up there with oxygen for breathing.”
There has been an evolution in how the industry thinks, added Talbot. “Build for the masses not the classes.”