CHICAGO: Scion Sees Shrinking Buildings
Scion Group president and aspiring race car driver Rob Bronstein, whose company owns 12,100 beds on 16 campuses, says he's seeing higher-end buildings becoming much smaller and more boutiquey—think 150 to 300 beds instead of 600 to 800 beds. (It'll shrink the pool of suspects stealing your socks from the dryers.) Prime sites near universities are scarce—especially to build big—and larger, upscale buildings haven't fared well because there's no sense of exclusivity. In new construction and existing buildings, he's also seeing a new focus on value as students and parents become more attuned to the overall cost of a degree. Where people used to jump to the shiniest new building, they'll now opt for product that's a year or two older if it means a sizable rent reduction.
It's harder to impress students these days—they're worried about jobs, moving back in with mom and dad, and heavy debt, Rob says. He expects that market fatigue to play out nationally, predicting 10,000 to 15,000 fewer beds will deliver this year than last. While Scion maintains a presence across the Midwest, it's kept out of the Chicago market for the past five years (save for a planned 200 med student-friendly units in the Illinois Medical District, above). Rob says enrollment's flat at city private schools (DePaul, Loyola, etc.) with a shift to more economical public universities, and the glut of purpose-built student housing in the Loop won't be absorbed any time soon.
Rob, left, speaks at a Bisnow event. Many students close enough to commute opt to save money and live at home. (Instead of being bugged by your frat bros, you're bugged by your real bros.) For urban students, living further afield also has appeal since they view school more like going to work, and their favorite hangout spots could be miles away. Luckily, downtown's high-end multifamily boom is freeing up Class-B properties for students. But on to the most important part, amenities: While buildings boast everything from lazy rivers to sky diving simulators to drum up buzz, the market's ratcheted back toward the essentials with its focus on price point, according to Rob. There are still some must-haves, though, private bedrooms, two per bathroom max, Wi-Fi, and in-unit laundry.