Student Housing Growing with Texas A&M's Population
Four new student housing developments opened this fall in College Station with three more slated for fall 2015. Should they worry about overbuilding in that market? Eastwood Multifamily Group of Marcus & Millichap student housing specialist Teddy Leatherman (second from right at The Real Estate Council Dallas Giving Gala) doesn’t think so. Her research shows about 2,346 units opened this fall while Texas A&M University and Blinn College added around 3,800 students.
Teddy says TAMU and Blinn are averaging about 3% annual enrollment growth, which has stimulated enough absorption to muffle the effects of elevated supply. The Northpoint Crossing Phase II, The Domain at Northgate (pictured), and the White Creek Apartments are all scheduled to open fall 2015 and will add 2,528 beds. This fall was the first academic year for The Northpoint Crossing Phase I, Hudson Trails, U Center at Northgate and The Legacy at Traditions. These properties all had occupancies over 90%.
This fall, some properties that are not walkable started offering concessions; these same properties reported a drop in occupancy from last year anywhere from 1% to 4.5%. Although the occupancy is still in the 90s, and in some cases the high 90s, this could be the first sign of market erosion, especially with more than 2,500 new beds coming next fall, Teddy tells us. If the schools enroll more than 3,000 new students next year, there should be equilibrium. But, success of the market expansion will depend upon TAMU’s continued enrollment growth, which is one of the university’s goals for its engineering school, which is getting a new building (pictured.) Teddy is planning to head home to Oregon for the holidays to see her parents and siblings.