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ATLANTA—CampusBrands Inc. has launched the first franchise for student housing with the help of NYLO Hotels. CampusCentre, as its properties will be branded, are to be located off the campuses of colleges and universities.

The CEO of the locally based venture is Kevin Bradt, a 10-year lodging industry veteran who was formerly a brand executive with Choice Hotels International. While at Choice, he monitored what become of hotels that left its franchise system. “I noticed a trend where some hotels were being converted into student housing,” he says. “You could be in a university market where there are hotels running 40% to 50% occupancy. But in that same market, there could be 50% more demand than supply in student housing.”

As he sees it, CampusBrands can achieve two purposes: finding a new use for some underperforming hotels and fulfilling an unmet need for quality student housing. According to the US Department of Education, more than 11 million students live in off-campus housing. The department also reports that university enrollment is expected to grow by at least 12% by 2013.

Moreover, off-campus student housing is a $40-billion market where the top 5% of the players own less than 5% of the marketplace, Bradt notes. “It’s incredibly fragmented and that is a great foundation for a franchise plan to enter into the marketplace,” he says. “The strong supply/demand fundamentals in this market are recession-proof. What’s fueling this is the echo boomer generation. The children of the baby boomers are going to be flooding the university markets for the next 10 years. But when you look at existing supply it’s older, outdated and there’s not nearly enough. New market entrants need training, tools, national branding and support systems to help them be successful. That confluence of factors is the reason why we decided to launch the company.”

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