The student housing business is as vibrant and exciting as ever. New product is being introduced at an incredible clip, with 87,000 new beds coming online over the past two years, according to data by Axiometrics. With ever-increasing options for students to choose from, we at Kayne Anderson have set forth an agenda not only to develop Class A buildings that are beautiful and highly amenitized, but also to understand our target demographic — the millennials.
To appeal to the millennial sense of experiential living evidenced by their constant stream of social media engagement, we couple a well-appointed building with a phenomenal resident experience. This strategy supports a successful lease-up and overall resident satisfaction, while creating the energy and buzz that millennials crave. The ultimate goal is to create a market image for each of our properties that is woven into the fabric of student’s lives, rather than having to “pitch” and “sell” students in order to lease.
The music industry, like many others, has been revolutionized over the last 10 years. Digital downloads are as easy as a swipe on your phone, and our residents experience music in an entirely new way. The advent of social channels has also opened a window to the daily lives of musical talent, giving each of us the opportunity to connect directly with tomorrow’s next big thing. Knowing that our students are seeking out live musical experiences, we created two exclusive national partnerships that have not only brought emerging talent to our properties but also facilitated the discovery of national talent.
First, we’re privileged to partner with Interscope Records. Interscope is among the most storied hit-makers in music history, working with giants like Lady Gaga, Madonna, and U2. Together, we bring their emerging artists and curated content via contests, ticket giveaways, The Loop box and other opportunities to students across the country. This partnership delivers a coveted music experience to our residents and the campus community, and is unparalleled in our industry.
Also in the music space, our partnership with Campus Entertainment facilitates local student DJ battles in our university markets. This affords student DJ’s the opportunity to get discovered and also the chance for national exposure. For example, Florida State University student DJ Kurr took the stage at our property Luxe on West Call’s event and climbed the Campus DJ ladder, ultimately winning the grand prize at ESPN’s National College Football championship. Aside from talent discovery, Campus DJ battles are popular events where classic rivalries go from the field to the turntables. These events give longstanding rivals such as University of Oregon and Oregon State University a chance to face-off in a setting that is even closer to the student community than the athletic fields.
Music isn’t the only cultural norm to have shifted. Twenty years ago, most high school students hoped to wake up on their 16th birthday to a car with a big red bow in their driveway. Today, car ownership is no longer a rite of passage; it’s more often seen as a hassle. Young college students want low-stress, low-cost ways to get around campus and the surrounding area. Seeing this trend emerge at our properties, we forged partnerships with multiple transportation partners including Uber, the bike-sharing firm Zagster and the car-sharing platform Zipcar to address the changing needs of our residents.
Our residents now have a multitude of options to get around their campus, their city, and even their state. With Zagster and Zipcar in particular, we look to pull the student to our site and offer transportation as an amenity, while at the same time marketing our property as the most convenient place to live. Students are excited to experience the ‘sharing’ economy, and see the convenience as a value. That experiential value, in turn, helps our properties maintain high renewal rates. In addition, the leads generated by walk-in traffic help our property stay ahead of the leasing curve.
Examining how our residents’ decision drivers have changed throughout the last five years has inspired us to work closely with best-in-class management companies to continue to search for ways to enhance the customer experience. We’ve rolled out a comprehensive survey approach that helps inform our decision-making and guide how we allocate resources, including additional bonuses for staff based upon customer satisfaction.
Year over year, we have evidence that our approach is working: our customer satisfaction scores are up 10 percent and our portfolio prelease average is ahead 25 percent at or above budgeted rates. Our partners at Asset Campus Housing, Capstone Collegiate Communities, Cardinal Management and Rise lead the charge in ensuring our residents have the best possible experience and renew at our properties year after year. We are extraordinarily thankful to our partner teams for shepherding this process and helping us stay sharp in understanding our consumer.
We are just scratching the surface, but have proven that by anticipating our residents’ needs, we are adding to the magic that makes our residences stand out among the competition. Their world is changing rapidly and to remain successful, we must not only keep up, but keep creating the places and spaces where our residents want to live before they know they want to live there.
As we work to master the millennial market, we’re fully aware that lurking around the corner is a new and mysterious demographic – Gen Z.
— Craig Zogby is the managing director of student and multifamily housing at Kayne Anderson Real Estate Advisors.