Tuesday, July 3, 2012

Atlanta’s Commercial Real Estate Show Looks at the Success of Student Housing

 ATLANTA, GA (July 3, 2012) – While it may be one of the more low-profile sectors of the commercial real estate market, student housing has quietly been one of the industry’s steady success stories.

 That’s the opinion of host Michael Bull and his guests on the most recent episode of “America’s Commercial Real Estate Show,” which took an enlightening look at the student-housing sector.

 “I think [student housing is] performing very well,” said Jim Arbury (top right photo), president of student housing for the National Multi-Housing Council. “Really, it’s a town-by-town unique experience, but generally speaking, it’s doing very well.”

 Demographics appear to favor the student-housing industry, Arbury added. “We did a study a year ago that showed freshman applications were up 20 percent in spite of the recession,” he said.

Furthermore, “there’s plenty of financing out there for both new development and refinancing of existing properties,” Arbury said.

 One “potential negative on the horizon” is that student-body populations could decrease if more students become leery of assuming a hefty amount of debt to go to school and then graduating into a poor job market, Arbury added.

 Andy Feinour (top left photo), a senior vice president with Carter, echoed Arbury’s observations, noting, “From a national perspective, all the metrics are up. Vacancies are down. Rent growth is up. Net operating income is up.”

“There’s no question that student housing is one of the darlings of the real estate business right now,” Feinour added.

 Dennis Gulseth (middle right photo) a project manager for the BOKA Powell design firm, said modern student housing features many more individual bedrooms and bathrooms than in decades before.

Also, “residence halls we see today in student housing are more like hotels or country clubs … They have spacious hallways, are well-lit. They’ve got all these specialty rooms, lounges, game rooms. It’s quite a different experience from what it used to be,” he said.

 Despite the high level people of interested in providing both equity and debt financing, it can be still be difficult to get student housing deals done, Feinour noted. “Underwriting standards are very high,” he said.

 Other topics discussed included amenities, cap rates and the compressed leasing timeframe for off-campus, privately operated facilities. The entire episode on student housing is available for download at www.CREshow.com.

 The next “America’s Commercial Real Estate Show” will be available July 5 and will feature interviews with the CEOs of leading retail REITs.


Stephen Ursery
Wilbert News Strategies
Office: (404) 965-5026
Cell: (404) 405-2354

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