Austin Developer Plans 31-Story Co-Living Tower Near Georgia Tech
An Austin-based student housing developer is venturing outside of its Texas confines and entering the Atlanta market with a new project.
Lincoln Ventures is proposing a 31-story co-living tower at 859 Spring St., at the corner of Abercrombie Place and a stone's throw from the new NCR headquarters and Tech Square. The 195-unit project also will include 1,800 SF of commercial space, Lincoln Ventures President David Kanne said in an email to Bisnow.
The project will offer 550 beds across the 195 furnished units, with 83 units set aside for renters earning 80% of the city's average median income, Kanne said. The market-rate beds are expected to rent for between $1,350 and $1,700 per month.
Kanne said college and university students will be a major target audience for the project, which will have one-bedroom units up to five-bed suites.
"The target audience of young professionals, faculty, and students working part-time, providing affordable co-living in the Midtown submarket of Atlanta," Kanne said. "[The] strategy is to bring a more affordable bedroom to the marketplace, where only luxury housing has been built."
The site includes a single-story Georgia Pacific office and a parking lot. It is unclear if the building will be razed or incorporated into the overall development. The Midtown Alliance Development Review Committee is expected to hear from Lincoln Ventures on its proposal Tuesday evening.
This building is just the latest in a surge of new projects geared toward college students in the city, according to Haddow & Co., an Atlanta multifamily data tracking firm.
There are 12 privately owned student housing projects encompassing more than 2,700 units and 7,800 beds in Atlanta's pipeline. Three projects are currently under construction, which will add an additional 1,500 beds to the city once they deliver, Haddow & Co. Managing Partner Ladson Haddow said. CA Ventures is among those under construction with a 27-story, 715-bed student housing tower at the intersection of Spring and Third streets.
Not including Lincoln Ventures, developers have proposed two other projects in Atlanta that would add another 1,400 beds, including Atlantic Capital Properties and Gateway Ventures' proposed joint $87M student housing tower off John Wesley Dobbs Avenue near Georgia State University.
Metro Atlanta has become a magnet for student housing developers in recent years as the state's university system saw record enrollment. Last year, enrollment in Georgia public colleges and universities hit an all-time high of more than 3,330,000 students, with Georgia Tech's enrollment jumping 12% over 2018 to 36,000 students, the Associated Press reported.
In August, Georgia State University welcomed its largest enrollment and freshman class in the school's history, with more than 54,000 students, the Atlanta Business Chronicle reported.
This is Lincoln's first foray outside of Austin. The company was lured here because its economy is similar to its hometown, Kanne said. The firm is in discussions for a construction loan.
"Atlanta, similar to Austin, has experienced significant job growth," Kanne said. "Our goal with this project is to provide co-living opportunities for all of the demographics and reduce transportation times, increase efficiency and create an environment for all to thrive in the continued secular trends in the Atlanta market."
Despite the spikes in enrollment, one prominent student housing developer is expressing concern about Midtown's student housing market.
Landmark Properties CEO Wes Rogers — whose firm has two Midtown projects, Mark Atlanta and The Standard, both along Spring Street — said rents for student housing units were deteriorating last year after years of development.
"We had another site near Georgia Tech we were evaluating but decided to walk away from it due to concerns over deteriorating fundamentals," Rogers wrote in an email to Bisnow. "I am concerned that this market will soften considerably if most of the proposed projects move forward. Once debt and equity realize how the market is really performing, I imagine much of the potential supply may end up not coming to fruition."
While the economy took a drubbing due to the coronavirus pandemic, which hurt many types of commercial real estate assets, such as retail, office and hotels, student housing projects near top universities across the country remained relatively stable, American Campus Communities CEO William Bayless said during an Oct. 27 earnings call.
“The resiliency of the modern student housing industry, operationally, financially, and from an industry fundamentals perspective, is once again being demonstrated as we transition into the new academic year amid the COVID pandemic,” Bayless said, adding that occupancy in his company's student housing portfolio exceeded 90% and rent collections were at 97%.
Bayless said American Campus is seeing fewer “resident hardship rent abatement request,” with several hundred this year versus “several thousand per month” in 2019.
“We have also definitively witnessed the strong consumer sentiment regarding students' desires to be in the college environment with their peers regardless of [a] university's curriculum delivery methodology, whether it being online, in-person or a hybrid combination,” he said.
Rogers also concurred with that assessment. Despite the softness in Midtown, the U.S. student housing market has remained strong and should do so as developers pull back on new construction.
"Enrollment and rents in our markets actually grew overall during COVID, while occupancy held up in the mid-90% [range]," he said. "Student housing held up better than just about any other real estate asset class during the pandemic, and further proved its resilience."