Student Housing Gets an Upgrade
Luxury student housing is popping up around colleges and universities across the country. Residential developers are adding fancier amenities to student housing options as enrollments in higher education continue to rise.
About 47,700 new beds are expected to roll out onto the market in privately owned, student housing properties this fall semester, according to Axiometrics, an apartment research firm. Universities in the Southeast are seeing the biggest increases.
These new student housing options are touting higher end amenities, including everything from stainless steel appliances, hardwood floors, en suite bathrooms, and in-unit washer and dryer. Some of the new student housing is also promoting its walkability to shops and eating areas, as well as 24/7 on-site emergency service and video surveillance, saunas and fitness areas, tanning beds, outdoor patio with built-in grilling, study lounge with computers, and even on-site convenience stores.
“Privately owned student housing is quickly becoming an integral sector in real estate, and performance metrics demonstrate its strength,” says Jay Denton, senior vice president of analytics at Axiometrics. As enrollments at colleges and universities continue to see growth, Axiometrics researchers are forecasting rent growth to remain strong over the next five years and occupancy to remain above 95 percent.
State universities are seeing some of the highest enrollment growth. Developers are stepping in to meet demand, but they’re embracing a higher end form of student housing than in the past.
“We had to do a lot of convincing that it wasn’t all ‘Animal House’ structures, but actually really stable cash flow properties,” J.J. Smith, COO of CA Student Living told CNBC. “Now that we have educated the institutional world, we’re seeing a lot of capital interested in these properties.”
Developers are moving away from affordable, garden-style apartments far from campus toward more pedestrian-oriented infill walkable high-wise construction around major universities, Smith says. Parents are showing they’re willing to pay 10 to 40 percent more than a university dormitory for more posh digs for their children too.
From the resort-style pools to sauna and fitness centers, “each year there continues to be another new amenity that gets introduced to the sector,” Smith says.
For example, CA Ventures at Colorado State University in Fort Collins reportedly is putting a ski and snowboard simulator into one of its properties. Golf simulators are also available at several of their properties.
Source: “Student Housing Ups the Ante on Amenities,” CNBC (Sept. 1, 2016)