Amenities, investment opps, and proximity. They're among the big three you should be watching. (Also, knowing who Lil Jon & DJ Snake are may help, but only so you can jam with the students.)
1) Quality & Luxury
No one is building cheap projects, says FourPoint Student Housing Investments principal Chris Epp (with director of private client services Meredith Wolff, and principal Chris Bancroft). As the new units deliver (about 140,000 beds for fall '14 and about the same for fall '15), it’s an amenities race. Chris Bancroft tells us it goes back to the early 2000s when dedicated student housing spun off of traditional multifamily. (Like how Baby Gap spun out of the Gap.) Every year developers would add more new amenities and that’s continued as everyone tries to best their competitors on asset quality and cool features.
2) Buying Opportunities Coming
There may be some unique value-add buying opportunities on the horizon in the student housing market as the 10-year conduit and CMBS debt comes due in the next two to four years. Most of that product is a little further away from campus and about 10 to 15 years old. These ownership entities—many of which are held in a TIC structure—may be looking to sell or be forced to sell because of maturing debt positions in the deals, Chris Epp tells us.
3) Walk to Campus
Location has been playing the largest role in new projects, Chris Bancroft tells us. The size of the developments may decrease if that means getting a site within walking distance of campus. (Or running distance for those students who hit the snooze button one too many times.) The guys tell us their start-up company, FourPoint Student Housing Investments already has 10 listings and is working on getting another dozen or so projects to sell. Chris Bancroft tells us he's reading The Frackers and headed to Rhode Island with his family for Independence Day. Chris Epp is headed to Maine with his family at the end of July.
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