Developer Is Carving Niche In Booming Student Housing Sector
With thousands of units of student housing underway throughout Northern California, the region is undergoing a mini boom in student housing. In addition to local, private colleges, the Cal State and University of California systems are scrambling to meet demand.
“There has been little to no new student housing built, sometimes for decades until only recently,” Amcal CEO Percy Vaz said.
While student housing development has been around for years, it was recognized in its own right in 2016 by several financial institutions, and large equity funds are now financing these projects more, according to Vaz, who will be speaking at Bisnow’s NorCal Student Housing & University Development event June 21. He said the returns are similar to multifamily and may be slightly higher.
Student housing can be either ground-up development or a conversion of a multifamily property. Single-family homes also have been used as an option, but they are often overcrowded and not designed for students. Student housing typically offers amenities, such as reading rooms and study areas, a gym and pools. On-campus housing is typically funded by the university with developers acting as builders, while off-campus housing is funded by developers. Amcal is working on both off- and on-campus housing projects.
The University of California began a $1B project to add thousands of on-campus beds to the UC system by 2020, according to Vaz. The university system has been rolling out a project each month for each of its 10 universities. Amcal is on a short list of companies that can bid on UC projects. Amcal has partnered with Servitas in a JV to provide proposals for the UC system. The JV is vying for a project at UC Riverside and is working on a proposal for UC Davis. Vaz said some of these UC projects will create upward of 5,000 to 6,000 beds.
Demand is so high at various universities, students are grabbing spots as soon as projects are completed. Amcal’s project for California State Monterey Bay leased up in about a week. Before moving into the project, students were commuting two to three miles and living in rundown units.
Amcal is working on The Graduate, a student housing project a block from San Jose State University. Vaz said pent-up demand at SJSU led his company to pursue the project. The Graduate will offer 260 units and 1,039 beds off campus. The 19-story L-shaped building at 300 South Second St. will include 14,750 SF of ground-floor retail, bike parking for up to 575 bikes and garage parking. Amenities will include an exercise center, a pool with a sun deck, sports courts, a picnic area and landscaping. It is expected to deliver by 2020.
Amcal has 6,000 beds of student housing in the pipeline in California and expects to finish its student housing project in Turlock for the fall 2017 semester at Cal State University, Stanislaus. Other projects in the works include 173 units (652 beds) in Chico for students of Cal State University, Chico, and 225 units (750 beds) in Sacramento for students of Cal State University, Sacramento. Amcal also will work on a 420-unit apartment complex at Cal Poly San Luis Obispo for staff and faculty housing. The developer is looking to do other projects in Washington and throughout California.
Since its founding in 1978, Amcal has developed more than $1.5B in student, faculty, affordable and for-sale housing across 90 developments, mostly in California. It has participated in more than 50 public-private partnership deals.
Find out more about Amcal's student housing projects at Bisnow's NorCal Student Housing & University Development event June 21.
CORRECTION, JUNE 14, 12:42 P.M. PT: The story was updated to reflect that Amcal is on a short list of companies that can bid on University of California system projects and to note The Graduate is scheduled to open in 2020.