Multi-Housing News - December 2008 - (Page 12)

development & design The ‘Echo’ Boom Gets Louder Student housing is healthy, but still requires finesse By Michael Russo, Contributing Editor More than 17 million students enrolled in universities and community colleges last year, and most will be looking to private developers for their short-term housing needs. “This is a very large market, and it hasn’t even peaked yet,” says Mark Humphreys, CEO of Humphreys & Partners Architects L.P., Dallas. “We won’t see it slow down for 12 or 13 years, and we’re about ready to feel the effects in the market-rate projects right now.” The latest statistics from the U.S. government’s National Clearinghouse for Educational Facilities also show that an increasing number of the nearly 75 million students from elementary school on up plan to go to college in the years ahead. “While the raw number of college-age students will continue to decline, the percentage of students going to college will continue to increase,” observes Mike Peter, CEO of Campus Advantage in Austin, Texas. “We’re near or at the tail end of the ‘echo’ boom right now.” The current generation of college students is called echo boomers because most are children of the baby boomer generation. They are shopping for off-campus housing in record numbers and demanding a lot more from developers than just amenities. “The ‘Y’ generation [of students] are a great group of people,” says Peter. “They are looking for a lifestyle experience and community involvement much more than just the ‘box’ they live in and the amenities it brings. They are more focused on success than previous generations, and we can’t hire enough of them when they graduate.” Architects and developers familiar with the market say financing is easier to get and profits are considerably higher in off-campus student housing than in market-rate apartments. “It’s the banks and lenders who are in distress, not the industries they are lending to,” says Bob Koch, founder of Fugleberg Koch Architects in Orlando, Fla. “The appetite for quality student housing is very large, as long as you are offering a social structure in addition to a room.” Living on-campus has become more expensive, and in most smaller cities, students can conceivably cut their rents in half by going off-campus. “There’s a lot of old housing stock out there, and developers are having a lot of success replacing it,” says Dan McAllister, a principle at KTGY Group Inc., Architecture and Planning, based in Irvine, Calif. Nevertheless, off-campus housing is a specialty market that requires a keen understanding of students’ needs and desires. “This industry is littered with developers who excelled in the multifamily market but failed in student housing,” says Peter. “To succeed in this market, the experienced operator must understand that student housing is a different animal.” “We’ve done plenty of plans for student housing wannabes who couldn’t make it work,” agrees McAllister. “It can be an operational nightmare, and if you run it like an apartment, you will learn some hard lessons.” Other architects describe student housing as “the 12 December 2008 | Multi-Housing News | Producer of Multi-Housing World

Table of Contents for the Digital Edition of Multi-Housing News - December 2008

Multi-Housing News - December 2008
Contents
From the Editor
NMHC Notebook
Executive Insight
Finance: Acquisitions/Rehabs
Market Pulse
Development & Design: Student Housing
Market Report: 2009 Best Bets
Directory: Software Providers
Tech: Leasing Tools

Multi-Housing News - December 2008