Which Developers are Targeting Texas?
Texas universities make great targets for new student housing development. Close to 100,000 beds have been delivered in Texas (more than any other state) in the last 20 years, and indicators all point to more beds coming (not that most college students get in them 'til 2am).
Why Texas universities? Enrollment growth, pent-up demand, and relatively inexpensive land, says Axiometrics research VP Jay Denton (hanging out with Texas artist Ginger Fox’s The Amazing Ball Buster—we can’t make this stuff up—in the Dallas office). The Texas economy also has played a role in new supply, he says, because the state attracts more jobs than any other. Kids relocate with their parents and often stay in Texas for their post-secondary education.
Development hasn't been just at Tier 1 schools. Developers have found opportunities at smaller universities, as well as historically commuter schools, Jay says. Just within the Metroplex, the University of Texas branches in Dallas (Richardson) and Arlington show potential. Most of the conventional apartment properties located within two miles of campus are at least 20 to 30 years old. (Those properties' kids are old enough to be in college.)
The University of North Texas is a great example of a school that has transitioned from a commuter school to a residential campus, Jay says. (College is about transformation, you know.) More than 5,500 beds have been delivered off campus over the last decade. Leasing overall in the market is close to last year’s pace, and most properties have positive rent growth. "The properties can also get demand from Texas Women’s University, but the location of the properties tells me UNT is the primary driver," Jay says. "I think we’ll see more private development at some of the other DFW campuses as developers look for more opportunities."