The developer can shave costs by building a four-bedroom unitaround shared living, kitchen and bath areas and student tenantsget higher-end accommodations at a far cheaper monthly rate thantraditional renting.

NorthMarq Capital Inc. says lenders like the new product andIrving, TX-based developer JPI, one of three or four in the nationpushing the notion, like the returns. The best part is it comeswith parental guarantees that rent will be paid for the full year-- reducing the risk factor in catering to a single-source base andstudents at that, Tom Lueder, NorthMarq's vice president in Dallas,tells GlobeSt.com. It's also a given that the driving force --established universities -- aren't going to pick up and leave.

"There is equity available for it as well as debt," Lueder says.Borrowers are being assessed a slight interest spread that's 15 to20 points higher than a conventional loan. He says it's a nominalamount and evolves from the risk of a single-source tenantbase.