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LAS VEGAS—Student housing remains a regional business forcompanies with a national footprint. In the “Opportunities inDevelopment” panel at RealShare Student Housing, moderatorSeth Mims, president of Specialized RealEstate Group, asked developer panelists about trends indevelopment across the country, whether we're at risk ofoverdeveloping and, if so, where.

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One of the key topics of the day was the rising constructioncosts and how developers are getting yields back up to where theyused to be. “Overall, it is a challenge. The optimistic viewpointis that it's an example of the market working itself out,” notedBrian Dinerstein, president of theDinerstein Cos. “There is a lot of demand. Pricesare going to rise and this might curb some new construction.”

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Dinerstein also expects to see rising costs to continue for theforeseeable future. “You have to have your eyes open and accountfor it.”

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Wes Rogers, CEO of LandmarkProperties, said that even with rising costs, there isstill a development margin that justifies new construction. “We arestill seeing deals make sense even with that challenge.” However,he said, “I could think of a few deals where it just hasn'tpenciled out, but last year, it might have.” To help mitigate theissue, Landmark takes measures such as buying lumber in advance andstoring it. “Things like that help control the cost a littlebit.”

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Rising construction costs are difficult anywhere in the country,explained Brent Little, president ofFountain Residential Partners. “We're trying to besmarter about the way we design, so we come up with the solutionthe first time.”

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When talking about parking, Rogers noted that his firm does itmore than ever, ands he recommended using prefab decks. “Sometimesyou have to adjust your site plans to accommodate a prefab deck,”in order to “get it just right for the most efficient deal becausethere isn't as much wiggle room in these deals,” he said. “We aregenerally ready to pay a little extra to be in the right marketsfor us.”

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When talking about steel versus sticks, Little points up thatsteel does cost a little more, but can represent a savings on timeand the labor that's in short supply right now.

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“There are certainly benefits,” adds JeffLarsen, principal of MVE Partners. “Youpay a bit more for it,” but the speed at which steel constructioncomes together is “a great benefit. We have seen that reallystarting to grow in our area as an alternative.”

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When discussing trends in development, from cottage stylehousing to garden to urban infill, Rogers pointed out that his firmis focused on urban at the moment. “It is hard to come by thecottage-type sites and we aren't doing a whole lot of garden,” hesaid. “If we aren't pedestrian to campus, we want to make sure thatwe differentiate ourselves.”

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According to Little, it is really more site-specific. “We wantto be approximate to campus and if we have a larger site, then wewill go with garden or cottage.” Having said that, he still sees amarket for some properties that are two or three miles away fromcampus. “You just have to be tenacious in getting the land youwant.”

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Dinerstein said his company looks at all the scenarios and tryto approach everything with the most conservative analysispossible. “It isn't the time to stretch and hope to get bailedout,” he said. “Right now, you really want to focus on the dealsthat make the most sense, and we have had good experience with thepedestrian infill product. So I don't see us changing our strikezone.”

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Rogers agrees that there is more risk in the marketplace at themoment. “With the smaller development yields, you have to keep youreyes open. We are a bit more conservative.”

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When asked about the biggest opportunity in the next two years,Little says walk-to-campus locations are really in vogue andstaying that course is where the opportunity lies. “Who knew thatpeople wanted to pay twice as much to live closer to campus?Students in what we thought were sleepy old markets will open theirpocketbooks to pay more for rent.”

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But he did warn that “You have to do your due diligence tounderstand the market rents, but so far there has been a hugepropensity to pay for proximity.”

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Natalie Dolce

Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.