Online Education Won't Stop These 65,000 Beds

Online education has been a hot topic in student housing for years now, but experts say the residential experience remains fundamental to higher ed’s academic mission—and 65,000 beds will deliver this year.

As enrollment grows, though, its important to cater your product to specific demographic changes, Chicago-based The Scion Group prez Robert Bronstein says. (Snapped on the right with Kayne Anderson Real Estate Advisors CEO Al Rabil yesterday at NMHC’s national student housing conference at the Palmer House.) Today, that’s women, international students, and kids with very involved (helicopter) parents. Al’s seeing a bifurcation between high-quality supply constrained markets and secondary and tertiary markets. He’d welcome more capital constraints and lending discipline, since we’re already building to the next bubble. (It’ll be painful, but there are opportunities at the bottom.)

Here’s EdR prez and CEO Randy Churchey with American Campus Communities CIO William Talbot. William says rumors of oversupply in the maturing asset class are overblown (and incredibly submarket specific). We’re delivering 65,000 beds this year, and that’s just a drop in the bucket relative to enrollment. Randy says EdR’s been selling off non-core student housing over the past few years because the spreads are too thin. That’s probably thanks to so much capital in the sector, not necessarily a bad thing for the asset class as a whole.

Chicago-based Harrison Street Real Estate Capital SVP Brian Thompson and Campus Apartments prez and CEO David Adelman. Since land is scarce, most new student housing is replacing existing or commercially zoned property that’s changing use, Brian says. (Harrison Street delivered 15,000 beds this year.) David worries about an arms race of over-amenitization, with “necessities” like lazy rivers and rock climbing. What’s really key is Internet connectivity and property management that knows how students operate. For example, they make most maintenance requests between 11pm and 4am and prefer to text, not talk to a human.

Continue reading this story with a free account

Log in or register
Sign up for more articles like this
Subscribe to Bisnow's Chicago Newsletters
Related Stories

$3B Foundry Park Project Breaks Ground: The Chicago Deal Sheet

'We Don't Have To Worry About The Future': Chicago Geothermal Apartment Tower Takes Shape

Foreclosure Auction Set For Loop Office-To-Residential Conversion

2.1M SF Chicago Office Complex Set For November Sheriff's Auction

2 Fulton Market Moves Signal Strength Of Top-Shelf Office Market

Illinois Voters Weigh Data Center Referendums On November Ballot

Owner Of Nearly 1,900-Unit Chicago Property Hit With Investor Lawsuit

JPMorgan's Chicago Office Renovation Costing Bank Over $800M, Dimon Says

High-Profile CBRE Chicago Exits Continue As 3 More Leave For Cushman & Wakefield

2 San Jose Multifamily Towers Change Hands For Combined $380M

Chicago Office Tower Sells For $550M To Zara Founder In Blockbuster Deal

Phoenix Apartment Concessions Are Luring Students Away From Campus Housing