Students Want Granite Countertops (And Just Might Get Them)
With 250,000 students in the metro area, Bisnowâ€™s 3rd Annual Boston Student Housing Summit yesterday might've been our most wide-reaching event this year. (Sorry, December always gets us thinking in superlatives. You, by the way, are our most favorite reader.)
Forget about running cross campus to the dining hall. In some schools, food, lounges, and study areas can be found on every floor of new dorms where promoting chance encounters for learning are as highly prized as they are in a tech office. (Before talking about food, we made sure to feed this 300-person audience at the Fairmont Copley.) The recession economy gave schools some running room to add and upgrade facilities. But now, it's all about caution, as the cost of capital and construction is headed back up.
Our panel: CohnReznick's Jim Perrino, Erland Construction's Eric Greene, Babson College's Michael McCorvey, MIT's Pam Delphenich, EdR's Jeffrey Resetco, ADDInc's BK Boley, and UMass Building Authority's Katherine Craven. Babson, eager to create new graduate programs, is seeking ways to house more students on its Wellesley campus. Michael says they're ignoring new trends in residence halls--private development, mixed-use complexes that encourage live/work/play--favoring the traditional dorm but without the cinderblock (picture a single-loaded corridor) as a way to promote "spontaneous collisions to engage in ideas."
In the past 20 years, MIT invested $1B to build 2.5M SF of new facilities designed by high-profile architects—housing, classrooms, and labs. Today, techies want location, price, choice; individual kitchens, not so much. Now, it plans to launch a $1B-plus capital renewal program on existing buildings, says Pam (above left with Elaine Construction's Jackie Falla). It houses 80% of its undergrads and 38% of its grad students, compared to just 6% of grads housed on campuses around the region. Still, given the escalating cost of housing, Cambridge would like the Institute to provide more on-campus living. If it does, it will look at various models: micro units, living/learning communities.
Eric (right, with colleague Donna Prince) is finding students with high expectations. They want to be close to campus, in an apartment with a contemporary layout, a full bathroom for every bedroom, in-unit washer/dryer, stainless steel appliances, and granite countertops. At UConn in Storrs, the Burlington-based builder is overseeing the construction of a fourth apartment building for EdR.
EdR, a public company that provides equity, development and management services, likewise expects the cost of capital to rise, Jeffrey says. The company builds privately owned dorms, does third-party ownership deals, and provides long-term management of development. Some colleges may use a third-party owner to be free of huge debts but still see a related revenue stream, including student fees. EdR is working with the University of Kentucky in Lexington to help provide approximately 8,000 student beds. This year, EdR has delivered nearly 4,000 of those beds. Robust IT has become standard and "more valuable to students than water," he says. (You can just order water on PeaPod.)
ADDInc has work on 15 different campuses, and lately BK is finding multifamily developers touring them for ideas. Some residence halls have smaller rooms, or desks have been displaced by sofas and beds. Common areas like study lounges are moving off the ground floor up to every floor. Students treat their dorm like home base and always want to be near a quiet place to concentrate, prepare food, and eat. BK says there's an enormous need and opportunity to develop housing for grad students. For privately developed dorms, it's tough to make the numbers work unless the college owns the land.
UMass finds its numbers growing on all five campuses, Katherine says. It's developed $1.4B of its $3B expansion plan—including new residence halls, renovations, and a $197M live/work complex at the flagship in Amherst. For the last few years, it's been relatively smooth sailing vis-a -vis the cost of borrowing and construction, but not anymore. With tuition at $23,000-a-year, demand to enter UMass is so high that when Katherine and her team develop, they know they'll hold the assets long-term and don't focus on an exit strategy. (No exit strategy sounds like a lot of college students plans as well. Six-year plan, anyone?)