Live from BASH!
If you’ve been biting your nails over the state of higher education, stop. (Take the stress off and get a hacky sack, or just stick to yoga if that's your thing.)
American Campus Communities CEO Bill Bayless told a crowd of nearly 400 Tuesday afternoon at Bisnow’s national Annual Student Housing Summit (BASH) at the Rittenhouse that there’s been a lot of misinformation in the media, but if you drill down, “the fundamentals are fantastic.” Even though we’re at the end of the Echo Boomer age, there are more 18- to 24-year-olds going to college than ever, he says, leading to stable, growing enrollment, particularly at Tier 1 schools. Even Moody’s says higher ed remains a valuable, long-term investment, which means more opportunity for real estate. (And we all know how cranky Moody's can be, just look at their name.)
ACC’s formula for success, according to Bill: proximity to campus, a differentiated product, and entering markets with high barriers to entry. (Not to mention school pride: we snapped him donning a Drexel tie, at right, with MSC University VP Matthew Stein, who moderated the keynote.) Student housing developers continue to make the mistake of overbuilding at a price point, which Bill’s seeing in college towns across the US. Another: not having the right mix of retail at a project, leading to empty space. “Every bad deal takes three good deals to make up for it,” he says. (Like getting lost in a jungle.) Overall, the 18-to-24 set is innovative, tech-oriented, and on the cutting edge, so they demand good technology and access. “If they can’t use their smartphone in your building, they’ll move elsewhere,” he says. They’re also more health conscious, so kitchens and in-building fitness centers are also attractive.
Where domestic enrollment is on the wane, international students are more than making up for it, as panelists on the university housing leaders’ panel attested. That poses challenges when students sign year-round leases, says Ana Hernandez, USF's assistant housing VP, especially when schools consolidate facilities for summer conferences. (She’s snapped with Michigan State VP of auxiliary enterprises Vennie Gore and retired U of Illinois housing director Jack Collins). Vennie says that six-month leases have grown among non-traditional students and those visiting universities for accreditation. Alternate usage potential is also important, as Jack says that UI’s newest dorms were built with interior redesign in mind.
Universities may also change the on/off-campus dynamics by extending their residency mandates. GWU housing director Seth Weinshel (left, with panel moderator Richard Newman of Arent Fox) says they're expanding facilities to accommodate students who must now live six semesters on campus, but adds that any housing policy can be affected by changes in university leadership. Seth likes raisable beds and whiteboard dorm walls among his favorite inexpensive amenities, while Jack likes individual heating and cooling controls. Vennie thinks “third spaces” for socializing and studying in public are important to include in facilities (and might help make Starbucks less crowded for everyone else). Another point of agreement: fast Internet connectivity is a necessity, not a luxury: "We get more calls when WiFi is out than when the plumbing is out,” says Ana.
Modernization and refurbishment of existing student housing will be a long-term trend, according to EdR CEO Randy Churchey, who kicked off the owners’ panel (he’s snapped far right, with Campus Crest CFO Donnie Bobbitt, HIG managing director David Hirschberg, and Campus Evolution CEO Andrew Stark). At the University of Kentucky, he’s building 3,000 beds, which are 200% applied for; all the other student housing is 45% applied for. Students are willing to pay a premium for modern—even $1,000/semester more, he says. David, who’s attending his 25-year college reunion this weekend, says dorms are nothing like he remembers—“they’re more like mini resorts.” Donnie argues you have to provide events and entertainment or else students are going to find their own entertainment. (Just remember your own college experience… don’t play innocent.)
Smart money is developing infill, pedestrian-friendly student housing, and that’s where REITs are going, says Vesper co-CEO Isaac Sitt (second from right, with Access Health Group COO Asher Epstein, who moderated, and The Collier Cos founder Nathan Collier). If you’re building away from campus, it has to be something special, he argues. Among markets and colleges the panel noted for overbuilding: Tallahassee, Texas A&M, University of Arizona, University of Central Florida, and Georgia Southern University. Nathan says that first market, in particular, is seeing 3,000 new beds for a net gain of 300 to 500 students per year. (At least they won't have to have a weird roommate.) Andrew adds he’s seeing too much construction in at least a dozen markets—“debt keeps coming around, and it’s reminding me of 2004’s overbuilding”—but there’s opportunity to build for schools in the 8,000 to 15,000-student range.
We learned from the design and development trends panel that students are cherishing the wellness experience, as related by Delos founder Paul Scialla (at right, snapped with Langan principal Michael Szura, who moderated). Delos' WELL Signature Suites make up a quarter of the 116-unit Legacy at Drexel Arms next to St. Joe's University (because Drexel students don’t have a monopoly on cool stuff with the name Drexel in it), with amenities like Vitamin C-infused showers, and light enhancement features that align the body’s circadian rhythm with the sun. (If we had that we probably wouldn't have missed so many calculus classes.) The yield on wellness dorms says it all: 17% premiums compared to non-wellness housing.
BKV Group CEO Jack Boarman (left) is excited by the quest for designs that tap into the energy of student communities. A few of his transit-oriented projects in Minneapolis include ample courtyard space plus retail components that boost the pedestrian environment. And in College Park, MD, WDG Architecture managing principal Bob Keane sees town-gown harmony at the edge of UMD's campus: he's worked amenities like club rooms, volleyball courts, and fitness centers into housing to bring people together.
We snapped ikon.5 architects' Sharon McHugh who showed us some of the Princeton firm's creative projects on both sides of the campus border: Barrett Honors College at Arizona State, a seven-building complex developed by the university in a partnership with ACC (and designed with DWL Architects of Phoenix); and Collegetown Terrace, an off-campus complex in Ithaca, NY.
You never know who you’ll bump into at a Bisnow event—here are Conservice Utility Management’s Rhonda Smith and Asset Campus Housing’s Julie Bonnin, who tell us they worked together at Insignia Residential from 1989 to 1992 (Rhonda was in the firm’s Greenville, SC office, while Julie worked in the Houston office).